Podcast appearances and mentions of brian right

In this episode of Building Texas Business, I speak with Brian Birdy, the CEO of PMI Birdy Properties and a regional developer for Dill Dinkers. Brian shares insights about managing his family business, which his father started in 1979. He discusses the complexities of succession planning and how involving family members can strengthen the business for future generations. Brian's latest venture, an indoor pickleball facility, highlights his ability to identify emerging trends and foster a unique business culture. We explore effective strategies for business growth as Brian emphasizes the importance of a solid foundation. He talks about the need for a strong team, comprehensive training, and well-documented processes to navigate unexpected challenges. Additionally, we discuss the hiring landscape post-COVID, where Brian advocates for a proactive approach to recruitment and the importance of adapting to new employment trends. As we move into the topic of franchising, Brian shares his experiences with Dill Dinkers and the potential of using repurposed industrial spaces for pickleball courts. He reflects on the benefits and challenges of setting up a franchise in this fast-growing market. His connection to San Antonio adds a personal touch, as he expresses his passion for the local community and its cultural vibrancy. SHOW HIGHLIGHTS I discussed with Brian Birdy, CEO of PMI Birdy Properties, about managing a family business founded by his father in 1979 and his strategies for succession planning and family involvement. Brian shared insights on the importance of building a resilient business foundation through strategic planning, comprehensive training, and process documentation, emphasizing adaptability to technological advancements. We explored the post-COVID hiring landscape, where Brian highlighted the significance of a proactive hiring approach, prioritizing candidates with a positive attitude and aligning with changing employment trends. The conversation delved into the burgeoning pickleball market, with Brian expressing enthusiasm for his new venture in opening an indoor pickleball facility and the potential of franchising with Dill Dinkers. Brian revealed the challenges and opportunities in the residential property management industry, particularly in differentiating oneself in a competitive market and adapting to shifts in housing demand. We examined the process of opening a pickleball franchise, discussing the benefits of franchising for newcomers, the importance of choosing the right franchise, and the potential for repurposing industrial spaces for pickleball courts. Brian emphasized the value of surrounding oneself with capable people, investing in staff, and being open to new ideas and changes to drive business success, while reflecting on his connection to San Antonio and the local community. LINKSShow Notes Previous Episodes About BoyarMiller About PMI Birdy Properties GUESTS Brian BirdyAbout Brian TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Chris: Brian, welcome to Building Texas Business. Thanks for taking the time to come on the podcast hey thanks for having me. So you know, let's dive right in and talk about some of the things that you're doing as an entrepreneur and business owner and just introduce your companies to the audience. Brian: Sure. So I'm the broker and owner of Birdie Properties, which is a real estate company that specializes in residential property management. It has been in business for over 46 years. My dad actually started that business back in 1979. I've been running it and working at it and eventually running it since about 97 and have grown it to one of the largest residential property managers in South Texas, learned a lot of lessons in growing that business and the newest adventure is Dilldinker's Indoor Pickleball, which I'm sitting in, and I'm very excited that we will be opening our first location here in about a week and a half. Chris: Well, that's great. So two full-time jobs, it sounds like. Brian: Yeah, Well, the other one's a family-owned legacy business. It's three generations deep. Like I said, my dad started it. My brother and I both worked in it. I've owned it and run it for 20, 28 years and currently all of my three adult children and my daughter-in-law all work there and do the heavy lifting. With a little bit of guidance from me, that gave me the ability that could run effectively without my daily requirement, gave me the ability to actually continue that entrepreneurial spirit and try something completely different, which is indoor pickleball. I saw a true need in my city for this. There wasn't anybody delivering it. I saw it as an up and growing and when I actually started on it, less people knew what pickleball was. In the last 18 months it has really come to the forefront and so I got on. I started riding the wave at the right time and I hope it just keeps rolling, yeah well, it's certainly taken the last couple of years. Chris: It's taken on like a life of its own, it seems like. So let's go back to, I guess, Birdy Properties and maybe the unique part of what it's like in a family business to do the succession from your dad, who was the founder, to you and your brother then taking over that business. What were some of the maybe the pain points and lessons learned about doing that and what maybe advice you might give to someone that's in the process or thinking about it, of what to do or not do? Brian: Yeah, running a family business it's wonderful and it's tough, both hand in hand. The wonderful part about it is their name is on that business. Their future is tied into that business. Their commitment generally if they really care about it is they're a lot more committed than just an individual employee. But at the same time it's problematic in that you can't separate yourself from business. Family meals are filled with business. Taking an entire family vacation becomes almost an impossibility. And then succession is an issue. I bought the business from my father and it was clearly me. I own it. So my brother continued to work there but was not in ownership of it. That has its own problems. We found a way for him to actually build a business out of this and he's actually gone out on his own, is specializing in short-term management and is running his own business now, and so that was a way to kind of figure out how that could work. So he is the owner, sole owner, of Birdy Vacation Rentals. But I've got three kids that work for me. Each of them have unique qualities. They own all own a very important part of the business and they really can't survive without them working together, which works great now, but it's going to be. I'm going to wonder, I keep wondering and trying to figure out how, what is the best way to pass this on? And I don't have the right answer for it, but continuing to work at it, you know, giving them all individual pieces that they could own and be the masters of, and then by doing that, everyone needs each other kind of helps with that whole process. You can't no one of them can survive without the others. Chris: Well, it seems, if that's the case, right then you've set it up well for success because that fosters that team environment and team mentality. And you know we love talking about culture. So obviously you have the unique relationship with your children. How have you tried to take that beyond the family relationship with the other employees so that they feel the same engagement with the organization and tied to the organization's success? Brian: So we've gone through lots of that and growing and basically anybody who works for us can see that. I mean their last name isn't Birdy, they're not in the succession plan but we treat everyone within our business as if it was a big family. We believe in family. We believe in quality time. Individuals who work for us recognize we want them to do a great job for us but when they need time, when they need something they know they can ask for it, they can get it and just building that kind of culture has allowed us to have. Number of people who have worked for us for 15, 13, 12, I think is my current people that are out there have been here for a very long time. They're part of the family even though they're not. You know, their last name doesn't say birdie on it, but we work really hard in building a core that can. You know, property management is a tough business. I've said all along one of our core values is that we're going to have fun, and so one of the things we've always built is if we can have fun doing the worst part of that business, then we got it made. So we have a lot of fun when we're doing the fun parts of the business and when we go out of our way to make sure people are going to have fun. But we also find ways just to have fun and to really own that. There are tough parts of that business also. Chris: Sure, well, true for any business, right. There's always, yeah, the piece that you don't enjoy doing. But you know you have to right, it's a necessary piece but it may not be the most fun. I think you're right. If you can bring joy and fun into that, then the rest should be easy. Brian: right, because it's the stuff you like to do and want to do and, as I think about, I've been doing that for 28 years and I love going to work there. I love people that I work with and even though it's in a very tough and stressful because I mean, at times I have to evict people from their homes, I mean that isn't something that's fun, you know. But it has encouraged me that I'm waiting to see how much fun is running a pickleball facility going to be, where we have a core value of bringing joy to everyone through the sport of pickleball. And I'm like, if I can have fun doing property management, I think I should find it a little easier to have fun running a pickleball facility. But I don't know yet. We haven't opened our doors yet, we're going to find out, but it's. I mean, I'm just it feels like it's going to be fun, but you know, I don't know what, I don't know yet. Chris: So going back to Birdy and property management is anything innovative? Or you know how? Has technology or innovation kind of helped you be more efficient in what you do and maybe more profitable? Brian: Yeah, so we've. We have challenged ourselves to chase technology. You know, if you go all the way back to probably, I mean, and we've done this for a long time and we've had a website since 1998 when it didn't do anything and most people didn't have it, I mean we have a five letter URL. I mean we are www.birdy.com, you know, and people have wanted to pay a lot of money to buy that name, but it's just something. Fortunately, my dad said I think this might be something someday, let me just get our name now. He was lucky, he did that. But from that we've continued to chase the changes. Every business has had major changes. I will tell you that, coming out of the 07, 08 mortgage industry collapse and all the problems that happened, property management got brought way up into the forefront and technology, of course, coming on strong at that time saw this as an open lane that nobody was in and they have been chasing after us like crazy. And we have said all along if we want to continue to be relevant, if we want to be a hundred-year-old business, the only way we're ever going to get there is we have to embrace technology, embrace change, figure out the ways to do that, race to it, understand it and apply it. You know however that is, and so we've dramatically changed our business from where we first I mean when we first started, you know everything was on paper. It was all in a folder. The folder was in a cabinet. You know, you met people face to face. I mean, everything has changed and you know, at our last national event, the big thing that was there was all AI driven. Not only have we used technology and we use computers and we've automated some things, but now we're having the computer starting to figure out what can they really do for us in the industry, and I see that being big changes coming forward as to what can it really do for us. Coming out of COVID, we learned we can do a lot and we don't really need an office to do it anymore. We can have remote team members. We can do a lot on Zoom. We can do everything with computers. I think AI is just going to push that, and that even runs into this business. Bill Dinkers has changed a lot and it's only a couple of years old, but it's incorporated on court cameras that film the sessions for the players, and now that company is building AI, so it's going to be able to tell them automatically. You know some statistics from their match, you know counting things for them and I'm like, and so again, very early stages open landscape that technology and AI development is just stepping into, and I'm just curious and excited to see what can that take us to. I mean, because that's the future of our business, all of our businesses. Chris: Oh for sure, I mean, technology is not going anywhere. I think I had someone tell me one time never bet against technology. Technology always wins right Eventually it continues to evolve and you may not be an early adopter, but you better pay attention and learn how to integrate it sooner rather than later, or you're going to get left behind. Brian: Well, right, and it'll show you ways that you can like. We can manage more properties with less people. Because of technology, we can have individuals working for us now all over the world and we have been embraced that for a long time and we're about a 50-50 business. Half of our employees are here in town. The other half are all remote team members and primarily in Mexico, because I'm in South Texas, so I need people that can speak Spanish, and what greater way to have somebody work for me whose primary language is Spanish? So that part has been a significant change in the property management side of it. And that comes with technology. Right, because they have a computer. They can do everything. They have a phone line, so you call my office and you hit the phone. It's calling them Because phone is now what? A computer? Everything is a computer. If you can learn how to adapt the changes in your business to automation, you find ways to grow and to make money when you're doing it right. Chris: So you mentioned the 08 kind of market crash. What were some of the lessons you learned? I think that's a pretty important or severe impact on your business business and we always learn, kind of through some of those crises. So what were some of the things that you learned, maybe about your company or, more importantly, about yourself that kind of helped pull the company through to continue on a path of success? Brian: Well, if you think about it, most people saw that as a crash, as a problem. In my world it was actually a good thing. Besides the fact that people were losing their houses to foreclosure, that was certainly a negative. That didn't help me at all. But what came behind that was investors, and investors were buying those properties and turning them in to single family rentals and they needed management behind it. People who wanted to hold onto their house but had to leave them could not sell them Again. Another thing we were ready for growth. We were prepared for growth and we were not scared to grow as fast as we possibly could In those years. We doubled in size in both 07 and 08. And I think a lot of that was we were preparing for growth and then something happened that we didn't expect. But we were ready and I don't think anybody else was, so we benefited from that. We exploded over about a two or three year visit and really skyrocketed us up that. We've never lost that position since. Chris: That's amazing. So you talked about you were preparing for growth before those events happened. What was it you were doing to be preparing yourself for that growth? Brian: Making sure I have the right staff, all my training, all my processes, systems, policies and procedures. You know, you, when you first start and you're an entrepreneur, you have this great idea. You know how to do it all in your head, you make sure it can work right. What a lot of entrepreneurs aren't great at is writing it all down, systematizing it all and teaching people how to do it. And so, as you're growing, you're just throwing things trying to fill in these holes and you have to learn there's got to be a better process to your business and growing your business, and an individual who is forward thinking and really crazy ideas and just really interested to go do all these wonderful things can come up with some great stuff, but they're not the person that's going to carry it the long-term, step-by-step and so, understanding what you're good at, learning who you need around you to fill in those pieces where you're not and luckily for me, you know I have children who are from me but not really like me and so and they're not really like each other and so, collectively, the four of us and others that we've built into that start to create more of a complete package, and we learned and we're continuing to learn. We are forever changing and we are forever growing. It never stops, and that's, I think, it. I think at that time, what we wanted was I wanted to grow. We were talking about growing and I was trying everything to be visible because, remember, technology hadn't taken over. You know, people weren't finding you online. You had to. You know, I was still paying for ads and newspapers and the yellow pages because I wanted people to find me. But I found technology earlier than anybody else. I found a program called allpropertymanagementcom when it first opened and it was the first marketplace for property managers on the internet and I raced to it. I was the only one there in 2007. And that's when everyone started freaking out what am I going to do with my property? They looked and they found me, and that was a big part of so just the little steps like that was like not, I mean, that was an investment, I was paying money to do that, but I thought there would be a payoff. I didn't expect the tremendous payoff I got, but it really was a lot about just making sure you know what you have around you and a lot of times, what happens is we don't hire for growth, right, we want growth, then growth happens and then we get squished by the work. Everyone gets overworked, everyone gets stressed, nobody's happy, culture starts to get hurt and you can't sometimes, can never hire fast enough to catch up to train them all. So, knowing your business, watching closely, investing in growth by investing in your people, those are some of the lessons I learned because I did all that wrong at first and I suffered because of it and I've learned to do it differently because of that. Chris: Yeah, that's a beautiful point. I mean to your point about if you start to grow you haven't, excuse me, hired for it then you start making hiring decisions out of desperation and that's a recipe for disaster, as opposed to being able to follow that process. As you mentioned, that process is in place, that you stick to that. You follow that. You're always looking to evolve and change and tweak as times change. But if you're behind the curve, if you will, then it's hard to catch up. Brian: You also have to change with times. I mean when you can be hiring, when you don't need to hire someone, you're not in a hurry. During your interview process you don't settle for okay, this person's good enough, right? You're like, if none of them are good enough, well then they're none. Keep looking right. But if you're in a hurry, if you're in a need, then anyone close you're going to take and it may not be a good fit for you. And I would tell you, before COVID you had people in large numbers applying for jobs, but after COVID that changed dramatically and it became a point. I mean I used to say if I could get 10 people to interview, five of them would show up, or maybe six, and one or two or three potentially could be good opportunities there and you'd be able to windle it down to possibly one good quality candidate. After COVID you were lucky if one person showed up, and I don't think that's really changed dramatically even yet today. Chris: That was my question. It feels, like in the last, say, 12 months or so, there's starting to be a little bit of a maybe it's slow, but a swing back towards people realizing. You know you hear the bigger companies saying five days back in the office and you know that you know where we had the quiet quitting going on in 21, 22. It seems to me there's a little less of that and it's coming back. There are maybe more people out there and you hear that you know new college graduates are having, you know, really difficult times finding jobs because it seems like it's tightening a little bit Well. Brian: Luckily I'm in a season in which I've not needed to hire and I've got everything placed out right, and so I hope when I start hiring again in that space I do see that change, because I've noticed a big difference there and even had to change my whole process of what's really important when I interview people I mean I have put you know the number there are two things that are at the top of the list, and that is an overwhelmingly positive attitude and an undeniable desire to work. And if people come in with those two things, I can take them from there with anything else, because I can't give them either one of those. I can't culture that to anyone, I can't teach that to anybody. They have to have those two things If they have those, if they have those two things clearly, and you can find figure that out pretty quick. Chris: So I have a chance to identify with that, because the words I use are we look for effort and attitude Right. And I like your desire to work. You would think that would come natural, but you and I both know it doesn't. You're interviewing people. They just want a job sometimes or a paycheck, and they don't really have a desire to work or work hard. So I agree, you have to have an interview process that can kind of figure that out. Brian: That's true and we've, and that's something you have to learn and experience and get through and continue to tweak because, as you think you have the best experience, your market of applicants change and then you have to change and adapt with them. BTXBAdvert Hello friends, this is Chris Hanslick, your Building Texas business host. Did you know that Boyer Miller, the producer of this podcast, is a business law firm that works with entrepreneurs, corporations and business leaders? Our team of attorneys serve as strategic partners to businesses by providing legal guidance to organizations of all sizes. Get to know the firm at boyermillercom. And thanks for listening to the show. Chris:So we kind of look at the landscape out there. What are some of the headwinds that you either are dealing with now or that you think may be coming around the corner, that you're trying to prepare for to kind of not let them slow you down? Brian: I think that in the residential property management space, when times are good we do well, when times are bad, we do even better. So generally making sure that we're running the best business that we can, that we're providing what people need, figuring out a way to be being better Everyone wants to say they're better, but being better doesn't really necessarily draw anyone's attention anymore because it's like are you really better? You're just saying you're better. But when you're different and you can show someone why you are different, that's what really changes it, and I and so we focus on how are we different, why are we different, how can we be different and what differences are going to be important in the next five years that may not have been important in the last five years. Chris: That's really good. Yeah, I could see where and I would think even the lots have been written about it how difficult it is for people to purchase a home. Now, right, the interest rates, one thing, maybe the lack of accumulated wealth or down payments because of the lending markets. I can see where that would boost your business. Brian: I would tell you that in 2024, nationwide the market said that rental markets should have been skyrocketing and doing well, but for a variety of reasons it was not the best year. 2025 has started out as a much better year. Last year was a rough year on most residential property managers and when we look at that it came back to a tremendous amount of apartment complexes that were built coming out of COVID that opened and it drew a lot of the market space away People not buying, not moving, families coming together in one location, which reduces right. But we've seen a big change this year at probably one of our busiest first quarters in a while, so we're hoping that just continues. Chris: Very good. So, shifting gears a little bit Sounds like a company that you love. You said you love to have fun doing it. I guess we're in it for most of your life, bought it from your dad. All things going well, Kids are in it, Kids are thriving and against that backdrop you decide to step out and take on the pickleball business, which there's certainly some competition there. Maybe San Antonio's market was a little lacking. There's certainly some competition there. Maybe San Antonio's market was a little lacking, but there's all kinds of people doing pickleball courts now. So what was it that inspired you or drove you to make that decision and take on that risk? Brian: Well, so I started playing pickleball for the first time coming out of COVID in 2020, when our mayor said, okay, you can go and gather, but it has to be outside. And so there was a tennis place that had converted on a tennis court. Still, they converted and made these makeshift pickleball and I went out and said, hey, this is a lot of fun. Eventually, chicken and Pickle opened in San Antonio. I went inside to that and I thought, hey, I really like this, and started playing there. Quite regularly. My wife and a non pickleball related injury broke her ankle and we were out for about a year. When I came back one year later, everything had changed. It was almost impossible to book a court. The age of the players had dropped 20 years in a year. It used to be forties and fifties and I walk in and now it's twenties and thirties and I was like, okay, something has really happened here. So I did a lot of research, looked at all the numbers and then I started saying, okay, we don't have enough courts and we don't have any indoor courts, and I was like I think we could do a good job at this. I was first trying to find a place to go play, and what it led me to is there's a need. Maybe I can solve that need. And then, in researching it in the state of Texas, san Antonio was lacking in indoor courts In the country. We're doing awful. Houston was the only city in Texas even on the radar for the number of pickleball courts, and the number of indoor pickleball courts they have more than anyone in Texas. They have more than almost any other city in the country. So that city had figured it out and I'm like we hadn't yet. And I'm like we hadn't yet and I'm like, hey, if you're going to do something and you're going to be different, one of the greatest ways of being different is be first, because if you're first, you're different. There's nobody else, right? And so so I dove in, found a great Dill. Dinkins is a national franchise and I believed in what they put together and and so I'm one of their first franchisees. I'm going to be opening up my first club here in about 10 days here in San Antonio, and I'm a regional developer, so I have the right to develop up to 20 clubs. Whether I open them or help somebody else who wants to run their own pickleball location here, I will be supporting them and getting them open, and I can open all of my clubs. Other entities can open all theirs. There will not be enough pickleball, because if I fill all my clubs up all 20 clubs open and they're all completely full that would only represent a fraction of 1% of the Bexar County population, and so there's room for everybody and there's room for growth. And that's kind of one of the reasons why I got into this is that I'm like hey plus, I love it. I have so much fun, and I'm going to tell you what running a property management business has been a lot of fun, but I really hope that running a pickleball business is going to be even a lot easier to have fun. We'll see. I don't know yet. Chris: Yeah Well, in 10 days you'll start to figure it out. Brian: Well, that's free, that's free week, everyone's coming for free, so they're going to love me for at least a week, for sure. We'll see what happens after that. Chris: Good strategy there. Yeah, I know. Look, we've worked with some entrepreneurs and developers here in the Houston area doing this right, developing pickleball venues with the bars and the food service, and that's where they did the market research. And even in Houston it's interesting to hear your numbers on the covered courts in Houston, kind of leading all cities but there is a lack of courts in light of the demand especially, you're certainly private clubs have taken converted tennis courts or extra space where they put in pickleball courts, but if you're not a member of that club you don't have access. And so for the general public to have access, things like what you're doing and chicken, chicken pickle, et cetera, and some of the maybe non-national brands just worn off local things there's still a ton of demand for that. Brian: Yeah, if you look at it, lifetime Gyms and LA Fitness have both decided they're going away from basketball and they're going all in on pickleball. And I talked to their national developer and I said why are you making this change? And they said well, basketball has led to altercations and fights and problems and pickleball equals new membership and so they're all in and you can see, most of them are converting them. I have a couple of Gold's Gyms in San Antonio that have converted into pickleball in their courts. It's just there's such a need, there's such a desire. A lot of people say they find a way to play, they'll play anywhere. A lot of people haven't played because they say it's too hard to find a place to play. So we're hoping we can be part of the solution to that and start giving lots and lots of options for people to come out and play and see how easy it is, how fun it is. The community that's built around this is unlike other sports is the community that's built around this is unlike other sports? It is. It is a unique game in which it is the most gender equal and age equal. I can go out on any given day and lose to an eight-year-old or an 80-year-old, and both of them could be a male or a female. It doesn't matter, because this is. It is the equal sport amongst all sports. Chris: Yeah, well, I'll say you know, given the timing when you're opening and the fact that you know we're in Texas, being covered courts is going to be a nice added bonus, because I don't think you want to be in the middle of summer outside on a pickleball court for too long. Brian: Well, they've been doing it for years. What I have to do is get them in here so they can see, and that's the thing about being different. So some things that are different with us is we have pro cushion courts. They're all individually fenced. We have special LAD court lighting that's designed specifically for pickleball. Of course, it's not windy in here. There's no rain, there's no heat, there's no humidity and, as you can see behind me, all the walls are black in the playing surface, and that's so. When you're standing on your court and your opponent hits the ball pops, you know it's coming outside. You don't see that. You got wind, you got heat, you got sweat, you got movement, you got craziness, and so that's where we've dove into being different and we're hoping it'll pay off. Chris: No, all true. I mean having played myself. You're right, if you're outside and depending on where the sun is, you may, it's sometimes hard to see the ball. Brian: Yeah, true, not in here. Perfect lighting, perfect temperature, perfect courts. And the one thing I get annoyed I'm a spoiled. I'm a pickleball snob. Now. I cannot stand playing on a court where the court right next door is not separated and their ball keeps coming into mine. I'm like I can't even play that way anymore. I'm, I've become a. I've become a pickleball snob. I expect to be able to get on my court and play my game and not be disrupted by anybody else. Chris: There you go, as every man and woman should have a right to right. That's right. So so you kind of bit this off as a franchisee. Let's talk a little bit about that. What are some of the things that you learned about that process that maybe you weren't expecting that you could share with some listeners, and maybe a lot of people look at franchise opportunities. Brian: So I tell people all the time. So I've been involved in franchising in a couple of other ways. I went for about a four-year period and worked for a nationwide property management franchising company called Property Management Incorporated and I was up at the corporate level seeing. So I learned about franchising itself and people go why are you doing this, why should I do this? And I would give them reasons why. If you're already running your business, you already know what you're doing. You don't need a franchise when you're starting out from brand new and you have no idea what you're doing and you're not really sure how you're going to do it. You have to consider that Anyone can do the business on their own right. Even me, I could have opened this on my own. But do you know how much stuff I didn't know about pickleball that I learned from my franchise organization and the attention that it has drawn me? You have to figure out when that might be right for you. I think that there's been a lot of benefit of doing that. But you got to examine them all. I went and looked at every existing franchise when I started to do this Now. Since then, there are five new Pickleball franchises available and I'm sure there'll be five more in the next six months. So there are a lot of choices. I looked at them all, I checked into their history, I interviewed, expect what they need to do, and then I went and did a discovery day in Columbia, maryland, to find out what was Dill Dinkers all about, and a big part of it is who is the leadership? Who's going to be guiding you? Who are you going to be working with? And I absolutely loved the people that were involved, and that's a big part of this. You're going to be in business with them at the same time, and so this made a lot of sense for me. They were structuring in a very smart way of doing it, and they're the fastest growing Pickleball franchise that's out there, and they've sold 27 regions across the country. They've made great strides at improving everything that we do the play site cameras that we talked about earlier, with the AI involved that's something that's new. The pro cushion courts that's new from when we first started, and now all of our pro shops are powered by Pickleball Central, which, again, is also something new. So when you look at a franchise, it's like, yeah, they exist, but what are they doing to evolve? What are they doing to be different, because you're going to rely on that and work with them to show them how else they can be different. I decided this was the way for me to go and by being a regional developer here in town, I have my first one opening, I have my second one already under construction and I've got 18 more to go, but I'm probably not going to open all 18 of those. So there are opportunities right now and the way Jill Dinkers is, they have your corporate staff, but I'm the local representative. I'm here to help develop anyone locally. So anyone who wants to open one here has me helping them, and I've already gone through all the pain and suffering of what does it take to open a place. I know all. I know what you need to do to have it happen. They taught me what they knew. Now I've experienced here locally in San Antonio. I know what's going to happen here. Those are some of the advantages when you start looking at franchising and say, hey, I want to do a business, I don't want to do it alone, I don't want to start and it's tough. There's things you've got to know to be successful right out of the gun and you may not know everything on your own, it makes sense. Chris: And I said there's the franchisors got to show that value right. The why you're going to be making payments and getting the benefit of some of their things. It occurs to me too, one of the advantages, at least to what you're doing with these indoor courts and just kind of looking behind you is that you could take advantage of some of the big box locations that have been abandoned right that there's every city has those where there was some store that has either now gone to a bigger complex but left that space behind it looks like that's what you can kind of take advantage of from a real estate perspective. Brian: Right and I figured, with my real estate background, that this was going to be a piece of cake. But let me just tell you, san Antonio is a healthy city. We don't have big boxes just sitting around empty. Finding the location was the biggest challenge for me, and that isn't true everywhere else. That's why I'm franchise number one, but I'm not the first franchisee to open, because there are people who found it much quicker. The gentleman up in Pennsylvania went on his very first visit and found two locations and has opened both of them. One of them has 17 courts inside with 75 foot ceilings and no columns. Wow, I think it was like an aircraft hangar at some point. It was an indoor soccer facility for a while and it is like the perfect layout for indoor pickleball. But he found it in one visit, found one landlord, signed two leases and opened them both up. I have been to hundreds of places because I have to have the right hype, I have to have space between columns. I got to have air conditioning, I got to have bathrooms and I got to figure out, you know what's it going to cost to convert the place? And in San Antonio we don't have a lot of space just sitting around empty. Well, that's a good problem, it's good, it's good for the city. I mean, I found this one and I found my second one and I'm continually looking and there will be more opportunities and there will be more opportunities and there will be. Yeah, I think the strange thing in my city is we have probably the most vacant space in our city is industrial space. There's industrial warehousing all over and it's all empty and they don't want to talk to me yet. But they're going to one day they're going to say you know what I'm tired of being empty. Maybe we should talk to these pickleball guys, because it's the perfect layout giant empty buildings just sitting around empty. One day, when I can start turning them into pickleball, then the life's going to be real good. Chris: For sure. So just real quick, though, I want to ask about you kind of just as a leader right, your leadership style and how you think that's evolved over time, and kind of what you've learned maybe about yourself and about leadership in the process, in that journey. Brian: You know I learned leadership pretty young. I mean I go back and think about it and say you know, my dad was in the military. I was a military brat. We were all part of scouting. That was you start learning leadership and scouts right. I joined the Air Force myself, I served time in that and that the leadership is pretty well defined there. I mean, you know you can grow into being a good leader through that process. But in the military leaders comes with rank. Sometimes you don't really you haven't earned it, but you get it because you wear the rank and there's a difference in just knowing and understanding. And in that I learned I'm like if I want to be a leader, I've got to earn the right to be the leader of other people. As I started growing my own business, the challenge was I know how I want everything done. I like it done. A certain way. Most entrepreneurs are type A personalities we got an idea, we're going to run with it, we want to do it and no one could do it as good as we can. Well, you're going to be awful lonely and awful small if you think you can grow business all by yourself. So lesson you have to learn is how do I surround myself with people who make me better, who fill in the gaps of the things I'm not, and how do I let go and let them lead? So I've learned to invest in my staff and invest in them being leaders and letting it go. And remember, if you get from point A to point B and it doesn't cost any more money and it isn't illegal, does it really? And it doesn't use up any more time, does it really matter if they got there different than I would have? And honestly, it doesn't. But that's a lesson I had to learn. I was not very good at it, so my wife and my kids pulled things out of my gripped hands because they were like you got to let this go or we're never going to grow. And then you look back later and go wow, I'm so glad I did that. I mean, they're doing a better job at it than I ever did. And then you just have to make sure you're continually watching over what you're doing right, building good systems, checking on what you're doing, investing in your people, which means spending money on them, spending money to educate them, spending money for them to go out and try things, and also, don't be scared to try something. It's probably one of the biggest lessons I've learned Don't be scared to try something new that no one else has tried, because they're not all going to work, and I can tell you some of mine that were absolute failures. You figure it out, you go eh, switch back, we're done. But the ones that didn't work grew the business, made me money right, made us more efficient, and not being fearful to just change, adapt and be different is a big part, and when your staff sees that you're willing to do that and you're encouraging them and you're investing in them and you're giving them the ability to lead, you'll be surprised what they can do for you. Chris: Right. Well, so first, thank you for your service and second, yes, I think part of that for me is you can't be scared to fail, nervous. And second, yes, I think you know part of that for me is you can't be scared to fail. Uh. So if you don't take any chances, you won't learn, you won't grow. So you've got to be willing to do that and be observant of is it going well, is it not? Do I need to pivot, do I not? For your business and for yourself? Right? Brian: and you have to listen to your staff around you, because at certain point when you grow a business effectively, you start to get out of the day to day, and so you've got to check on it, you've got to hear from them, you've got to build on it and you've got to give them the ability to tell you maybe it is time to pivot, maybe we need to do something different, maybe there is a need out there, even though you didn't recognize it. They need to know. They can bring it to you and you'll listen Doesn't mean everything is going to change, but you give them a chance to speak it up and then it's out there and then you talk about it, and we do that regularly and it really changes the business when people have the freedom to bring up ideas and not be afraid of it. Chris: So let's move from the business side of things to just personal. Tell me what's your favorite part about San Antonio and why you decided to call it home. Brian: I moved here with my dad. He got stationed here when I was 13 years old and this has been my hometown almost ever since I joined the Air Force and I did leave here and I missed it all while I was gone. There's something about the community here in San Antonio the people, the events, the city that I missed. I've lived in other places. I don't think I ever missed not being there as much as I missed being here, and so this is truly my hometown. I love the city, all that we have going on, the fact we continue to grow and get big but we still feel like a small town Never and there's something for everyone. There's everything you possibly can want to do. You can do it here. I mean, we're in the middle of Fiesta. It's been going on forever, but there's still something in Fiesta that I still probably haven't even done. As many times I've gone out and done things and it's exciting just to be involved in that. I've been a Spurs fan since I moved here. I actually saw the Spurs as soon as I came back. We were coming back from Italy, moving to San Antonio, and the Spurs. I was 13 years old. The Spurs were in the Eastern Conference Finals against the Washington Bullets and they were up three games to one and I watched them lose the next three games and then not, and then I followed them and we didn't make it back to a conference championship for 20 years in 99. And then the next 20 years was a good payoff. We had a lot of fun and won a lot of games. Chris: So this is my town. Brian: I love my city. I love all that we do here. Chris: Yeah well, it's definitely spent enough time there to get a feel a very unique and welcoming culture and vibe. You mentioned Fiesta, but I don't see any badges on you. Brian: They're on sale at the front counter. Gotcha yeah, I actually was we made one, we've made one, we've traded some. A few people have bought them and it's a fun part to be part of that when you run a business in San Antonio. Chris: For sure. I've had the benefit of being there for a week on business during Fiesta and learned the whole thing about the badges and the trading and still have them with me. That's a lot of fun. Brian: Yeah, last weekend one of my managers took them all, went down and was down there handing out badges and also handing out flyers about our business Just getting the word out and getting connections to both people and other businesses. It's a unique time when everyone's just willing to talk to you and get face-to-face and everyone wants everyone else's medals. The Fiesta medals are kind of a cool thing, yeah for sure. Chris: Okay, last question Do you prefer Tex-Mex or barbecue? Brian: Tex-Mex for sure. I'll tell you this in traveling the country. There are other places where you can get barbecue. Maybe not quite the same, but there's some good barbecue out there. There is no good Tex-Mex anywhere except here. Chris: Yeah, yeah, I think it's a pretty accurate statement. Well, brian, I really appreciate you taking the time to kind of share your story, both on the property management side and Pickleball. Good luck with the grand opening coming up and look forward to seeing you guys succeed in that industry as well. Brian: All right, well, hey, great Thanks for having me on Great conversation. All right, take care. All right, bye, and there we have it. Special Guest: Brian Birdy.

In this episode of the IC-DISC Show, I sit down with Brian Schwam to discuss how Interest Charge Domestic International Sales Corporations (IC-DISCs) can help businesses save on taxes. With over 35 years of experience, Brian shares how IC-DISC has evolved since 1972 and why it remains a valuable tool for U.S. exporters. He explains how businesses, particularly in the aerospace industry's Maintenance, Repair, and Overhaul (MRO) sector, can take advantage of this incentive to improve their financial position. We walk through a hypothetical example to illustrate how an exporting business could benefit from IC-DISC. Brian explains how companies involved in manufacturing, repairing, or trading parts can qualify and why many eligible businesses overlook this opportunity. We also discuss the annual MRO conference in Atlanta, where industry professionals gather to share insights and best practices. This event highlights the ongoing impact of IC-DISC within the aerospace sector and beyond. Despite the clear benefits, many businesses hesitate to implement IC-DISC due to a lack of awareness or expertise. Brian talks about how our firm partners with CPA firms to integrate IC-DISCs into existing tax processes, making it easier for businesses to take advantage of these savings. He also highlights the underutilization of IC-DISC and why more companies should consider it as part of their tax strategy. We wrap up by discussing the upcoming MRO America's Conference in Atlanta, where exporting aviation maintenance companies can connect and learn more about IC-DISC applications. Whether you're new to IC-DISC or looking to refine your approach, this conversation provides useful insights for businesses considering this tax-saving opportunity.     SHOW HIGHLIGHTS In this episode, I discuss the intricacies and benefits of Interest Charge Domestic International Sales Corporations (IC-DISC) with tax attorney Brian Schwam, who has over 35 years of experience in the field. We explore the historical context of IC-DISC, including its origins in 1972 and the significant changes it underwent following international scrutiny and U.S. tax reforms, such as the 2003 Bush tax cuts and the 2017 Tax Cuts and Jobs Act. Brian provides insights into how IC-DISC can serve as a valuable tax incentive for U.S. exporters, particularly those in the aerospace industry's Maintenance, Repair, and Overhaul (MRO) sector. Through a detailed hypothetical example, we illustrate how companies can leverage IC-DISC to maximize export profits, highlighting specific benefits for pass-through entities and closely held C corporations. We address common apprehensions businesses face regarding IC-DISC implementation and discuss how collaboration with CPA firms can facilitate a seamless integration into existing tax processes. Despite the clear benefits, IC-DISC remains underutilized, and we emphasize the potential missed opportunities for businesses not taking advantage of this tax-saving strategy. The episode also covers upcoming industry events, such as the annual MRO conference in Atlanta and the ICDISC Alliance Conference, which offer valuable networking and professional growth opportunities.   Contact Details LinkedIn - Brian Schwam (https://www.linkedin.com/in/brian-schwam-b6026a3/) LINKSShow Notes Be a Guest About IC-DISC Alliance About WTP Advisors GUEST Brian SchwamAbout Brian TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hey, brian, welcome to the podcast. Brian: Thanks, dave, good to be here. Dave: So where on planet Earth are you calling in from today? It's hard to tell by looking at your background. Brian: Outer space. I am in the sunny South Florida. Dave: Okay. Brian: Breezy, south Florida, okay. Dave: Now are you a native of Florida. Brian: I am not a native of Florida. I spent 50 years of my life in the upper Midwest in Wisconsin. Okay, I had to move to Sunbelt. Dave: Okay, Now were you educated in the Midwest then too. Brian: I was. I'm a proud alum of the University of Wisconsin, both for an undergraduate degree in accounting and also my JD from the law school Okay. Dave: So you've and I take it and I've known you a while, so I think that's been several decades ago that your career was started. Is that about right? Brian: Several would be a good good approximation. Yes, I've been at this for 38 years. I know it doesn't look like it, right, okay? Dave: And so, and how long have you been involved in ICDISC? Then Most of that time 38 years, oh, 38 years in ICDISC. Then most of that time, 38 years, oh, 38 years in the disc, wow, yeah. So how does that do you know? Do you have any way to quantify that? Like how many you know ICDISC returns you've, you know, signed or reviewed or prepared, or Boy, it's a big number, dave. Brian: It's probably five figures. Okay, probably, so you know, somewhere north of 10,000 for sure. Okay, over that time period. Dave: Well, and that is why I'm glad that you are one of the founding members of the IC Disc Alliance with me that when I had a chance to partner up with you and some of your team when we created the IC Disc Alliance, I was really excited because in my book I pretty much knew all the players in the IC Disc space and once the famous Neil Block retired after 50 years to me you were without peer in the IC Disc space. Brian: So I really enjoyed collaborating with you through the years here in the ICDISC space, so I really enjoyed collaborating with you through the years. Dave: Thank, you for that, Dave. I hope to be able to follow Neil into that 50-year stratosphere. Yeah, that's big shoes to follow. So let's just talk a bit about the ICDISC. What the heck is it? Why does everyone use that silly acronym? Brian: Because what it really stands for is a mouthful. Dave: Okay. Brian: Discharged Domestic International Sales Corporation and that is what the ICDISC stands for, short right ICDISC. And I don't know if we'll get into. I'll get into what the IC stands for and everything. But basically this is an export incentive that's been in the Internal Revenue Code since 1972. Okay, in various forms. Initially it was an export incentive that just about any company could use, that was exporting goods that were manufactured, produced, grown or extracted in the US. It came under some fire from our trading partners and in 1984, it was transformed into the ICDISC. It started out just as the DISC in 1972 for the Boston International Sales Corporation and it, like I said, came under scrutiny. Our trading partners said hey, you're a, you can't have an exemption from income because you're not. You know you tax things differently in your country. This flies in the face of the other incentives you give your taxpayers. So they changed it into the ICDIS, which made it into, instead of a permanent tax savings, at least on its face, into a temporary savings where, to the extent a taxpayer saved tax and deferred income from tax, they were required to pay an interest charge to the IRS on that deferred tax. Hence the IC. Dave: Okay, okay. Brian: That rate changes every year. It's based on the one-year average TBLO rate as of September 30th annually. And at the same time they instituted something called the Foreign Sales Corporation, which was widely used by thousands of companies, and that came under attack and eventually became the extraterritorial income exclusion which was immediately attacked and eventually, a couple of years later, it just went away. In the meantime, the disk floundered for quite a number of years. In fact, in the year 2000 there were only 787 disks in existence. Dave: Wow, it seems like a shockingly small number. Brian: Well, the tax laws weren't real conducive to benefiting from the disk at that time. Then, in 2003, the Bush tax cuts brought in the concept of qualified dividend income and it took the disk off of life support and really put it on robust territory for pass-through entities, because they could now, to the extent that they could qualify and we'll get into that, to the extent they could qualify and to the extent that they could benefit it provided a 20% rate benefit between ordinary income and qualified dividend income, so it was a significant savings. Now that's been whittled away over time, where it's been reduced here and there. Various tax law changes and probably the largest or the next biggest reduction came in in 2017 with the Trump tax bill, the Tax Cuts and Jobs Act, which reduced the rate on qualified income on non-qualified income. So it reduced the rate on S-corp income partnership income in an individual's tax return to a 29.6% level, and so now the spread between the qualified dividend rate and the ordinary rate just isn't as great as it used to be. It's approaching 6%. So where it used to be 20, then it went to 15, and now it's 6. But it's still a permanent savings for these past three entities and it's not something that they should ignore, because it can save significant taxes, depending upon the level of export activity. Dave: Okay, and now to be clear, depending on a company-specific fact pattern, that spread could be greater. Right For a pass-through. It could be as high as what like? Brian: 13% or so For a pass-through it could be as high as what like, 13% or so For a pass-through business. Dave: It could be as high as 13.2%, okay, but in general we see that it and it could even be somewhere between that, depending on. Brian: Anywhere in between 5.8 and 13.2. Dave: And our experience has been that most companies tend to gravitate more toward the lower end of the savings than the higher end. Brian: Yes. Dave: Yes, okay. Now what about for a C-Corp? Brian: C-Corp is a different animal. Okay, a C-Corp can't use an disc to pay deductible dividends to its owners if it's a closely held C corp. This is not something that a public company can benefit from. But if a closely held business C corp is paying dividends to its shareholders and would like to be able to deduct those payments, rather than not being able to deduct those payments, using an ICDIS can transform the dividend into a deductible dividend. Now, it doesn't save the shareholders any tax, because they're paying tax on the dividend regardless of where it comes from, but it would eliminate the corporate level tax on the C corporation, so that benefit could be as high as 21%. Dave: Okay. Brian: Okay, another manner in which certain C corporations use the disc is to fund bonuses for shareholders and key employees, and then that saves the shareholders 17% tax the difference between a tax on a wage and a tax on a dividend, qualified dividend. So that's a 17% savings for the shareholder. In that case the C-Corp doesn't save any tax. They're getting a deduction either way wages or commission to the disk. And now that I've mentioned the word commission, that's probably a good segue into how does a disk earn income? Yeah, and what is its income? So most discs are what we call commission discs. They earn a commission when a operating business that's related to that disc makes an export sale of qualified export property. So let's dig down into that first. What's qualified export property? Well, that's property that has been manufactured, produced, grown or extracted in the US. So if I'm manufacturing in Mexico or Canada or China and I'm simply selling what I've made in those other countries, you know the disc is not something that's going to benefit that type of a business. Dave: Okay. Brian: It is there to spur US manufacturing, create US jobs, right in line with the America First proposition that's headlining Washington in 2025. Dave: Okay. Brian: So it should be on safe ground, everything that's going on there. So if a company has property that's been manufactured, produced, grown or extracted in the US and they sell it for export outside the United States and not to a US possession, then that sale can potentially generate an ICDIS commission that would be paid to the ICDIS. And keep in mind this ICDISC is not an entity that the outside world sees or understands or knows about. It's simply an entity that does business, if you will, internally with the operating company, so customers don't know about it. It's really transparent to the world. It's just there to help US exporters save tax. Dave: Okay, it's just there to help US exporters save tax. Okay, and the logistics of it. Like say a company has just for simple math, let's say they have $10 million of export, of qualified export revenue, and the ICDIS commission that's calculated to say 10% of that. Brian: Okay. Dave: So 10% of that would be a million dollars, and so walk me through kind of the that's correct and it accrues the deduction, assuming it's not a cash basis taxpayer. Brian: It accrues that deduction at the end of the year, the DISC accrues the income at the end of the year and then by statute the DISC does not pay income tax. So now we've gotten a deduction on one side, we have non-taxable income on the other side and then when the disc pays a dividend to its owners, that becomes a qualified dividend and is taxed at a lower rate. Dave: Okay, so then, effectively, that million dollars gets reclassified from being taxed at ordinary dividend rates to qualified dividend rates. Brian: From ordinary income rates to qualified dividend rates. Dave: yes, Yep, thank you for that. And where that shows up for a pass-through is going to be on the individual shareholders, k-1, right. That box up near the top that shows ordinary taxable income would basically go down. Let's say there was one shareholder, that number goes down by a million dollars. And then there's a box further down on the K-1 for qualified dividend income and that's where the number's being shifted to right. Brian: Right. Assuming the disc is owned by the operating company, which most of the time it is in the pass-through business context, then the ordinary income gets reduced on the K-1 and the dividend income will increase on the K-1, not necessarily in the same year, but that will be the result over time. Dave: And then that tax savings then will show up on the individual shareholders. 1040, right, because their ordinary income line is a million dollars less. The qualified dividend income line is a million dollars more, and that's where that arbitrage. Brian: They pay less tax if they're getting a distribution from the company to cover their taxes, which is often the case, the company doesn't have to distribute as much cash, therefore increasing the working capital of the business. Dave: Okay, well, thank you. Thank you for that. Now, what I want to drill down into a little more today is looking at the aerospace industry, specifically what's called the MRO space in aerospace. Do you know what MRO stands for? Brian: I believe, I do, I believe maintenance, repair and overhaul. Dave: That's my understanding as well. Brian: That's a significant area in the aviation space. Dave: yes, Okay, and I believe that there's a big conference in Atlanta in April with like something like 17,000 expected attendees. Brian: Yeah, just a small gathering. Dave: A small gathering. Brian: For sure. Yes, that's my understanding as well. In fact, I'll be there. Dave: Yeah, I believe we'll both be there, yeah we'll both be there A few of our colleagues. Brian: Yeah, so it's a one a year significant gathering of companies that operate in this MRO space, supporting airlines and other aviation companies, and basically MRO is important because it keeps planes able to fly. Yeah, and we actually have a booth there. Dave: Yeah, and we actually have a booth there. 1818 BC and it makes it sound like it's a date from a long time ago. But yeah, we'll be there and this will be our first year in attendance or exhibiting. And this has come from, in recent years, I'd say, a big ramp up in the number of MRO companies who we are helping with their IC disk. Is that right? Brian: Yeah, absolutely. In fact, one of the sponsors of the conference was a company I was doing some work with and I asked them if he thought it would be a good idea for us to attend, and it was a resounding absolutely that he thought that we could meet a lot of companies that could benefit from this ICDISC similar to his company. Dave: Okay. What are the elements in the MRO space or the characteristics of the companies that make them a good fit for the ICDISC, because my understanding is it's probably only one out of a hundred of like all the registered corporations in the US are really a fit for the disc. Brian: Yeah, so it takes a specific fact pattern to really benefit. So the companies in the service side of the business so let's say they're carpet cleaners or something to that nature they're not going to be able to benefit from the disk. But let's say it's a repair center and airlines will ship in parts to the repair center because they've worn out and they need it. They need a replacement part so that they can fly this plane. So what happens is maybe the repair center takes their part and repairs it, but they previously repaired another part that's identical and then to the customer and that plane gets back in the air right away. So in that scenario, even though it's a different part that's going back out versus what was coming in, that type of activity qualifies as long as what they're doing qualifies as manufacturing and that repair is occurring in the US. Dave: Okay. Brian: Then that type of a company could definitely benefit Other companies. I don't want to use this term, but it's kind of like horse trading. Sometimes companies will buy a surplus of parts, knowing that eventually they're going to be used by somebody and they hang on to these parts, or they find them from somebody who says I don't want these parts anymore, I haven't been able to sell them. So they take a flyer, they take a risk and they buy these parts and they hang on to them and maybe they sell them at a significant profit and maybe they don't. But there's that space as well that can benefit from the disc, and there's some misconception out there that some of the companies that are similar to what I just described can't benefit from a disc, and so, for example, if parts are obtained outside the US, they stay outside the US. They stay outside the US and they're repaired, recertified and resold. Those aren't going to qualify for the ICBITS. But sometimes parts are acquired outside the US and they're brought into the US, they're repaired, put it back into inventory in the US and then sold for export, and that activity does qualify for the ICs, and so it's very important to know where this refurbishment or remanufacturing is taking place. Dave: Okay and yeah, and there's a US content piece to it, right, like if they buy a part from China and all they do is they just put a little lubricant on it and throw it in a box. Brian: that may not qualify and then they export it. The test is what's the customer's value when that part comes into the US. So if it's a burned out hot engine part, for example, yeah there's no value or very little value and it comes into the US, its customers value is close to zero. It gets repaired, it's going to easily meet the content test and it's easily going to be considered manufactured in the US. It's rare, I think, that we'll find that somebody will buy a new part from outside the US just to inventory it here for export. Dave: Okay, yeah, because there's that it's a 50% US content test, right which? Is also, I think confusing on the surface if you don't really dive down into the rules, right, I mean, the layperson may find it. Brian: How do you know what's 50% US content? Well, the cost of good, I mean. Think of it the other way. The foreign content can't be more than 50%. And the foreign content is the cost, the customs value when it was imported. So if I'm selling something for $100, I imported it for as much as $49.99. That's going to qualify as long as I did something, you know, remanufactured it once it got to the US and once it got to the plus, more often than not, I think the value of those things coming in because they're used and worn and damaged parts, they're going to have a low customs valuation where there'll be no problem meeting that content. Dave: Okay, I can see that. Well, I find and my listeners tell me they really like kind of case studies, little mini of case studies, little mini, you know, client case studies On an anonymous basis. Do you have an example or two of some of the types of companies we've worked with, just to give people a flavor of them and, again, you know, being anonymous to you know? What company it is, but just a sense of like the sense of the size of the company, what the benefit might have been. Brian: The size is sort of across the board, right. So some of them are someone on the smaller side. They might have export sales between $5 and $10 million, and then some of them might have export sales of $100 million. It all depends on the size of their business and the benefits are kind of all over the map. Because we don't just do a simple calculation of the benefits. And the reason we don't is because in this industry what we find is there's a lot of margin variability in the companies that are exporting, and then a transaction-by-transaction analysis of the disk commission is what makes the most sense. That allows us to benefit from the margin variability, allows them to benefit from a higher disk commission and obviously then they're going to save more tax. And in some cases the commission grows by 10x by using the T by T. Sometimes it's two or three x, sometimes it's. You know, I've seen you know where it would have been zero because there was an overall loss in the company, but we were able to get a significant discommission with a T by T approach. So it's hard to pinpoint an exact number, but generally speaking it's 15 to 20, you know the commission ends up being 15 to 20% of sales. And if you look at the statutes, one of the statutes says oh, the commission can be 4% of sales, and another implies that it could be anywhere from 4% to 10%, but we generally see in this industry at least 15% on average. It's significantly higher. Dave: Yeah, and I'd like to drill down into that because I tell, and based on my understanding, we may manage more IC disks than any other organization of the country. I mean we I think our number is somewhere north of 500 companies now that we're helping out, and when I'm having these conversations, you know. So I'm, as you know, I'm more focused on the sales side. You know, and you and your team are more focused kind of on the technical aspect of producing these returns, and what I tell people is that our real value isn't being able to produce an IC disk return. Our value is the incremental benefit that the transaction by transaction calculation yields. That the transaction by transaction calculation yields. Because you know just about any any cpa firm you know most of them their software includes the ic disk return. You know, if they just go do a four percent calculation, it's a, you know, reasonably straightforward calculation. But we find that you know they're capturing only a fraction of the total benefit. Brian: That's true, and while I've seen a good number of interesting looking disc returns, I tend to agree that if you follow the directions, anybody can probably prepare a disc return. We do that as well. That's not where we add the most value. Where we add the most value, adding the value comes in unlocking the highest commission possible so that the tax savings are as great as possible. Yeah, and a lot of businesses that are high margin I'm sorry, low margin high volume businesses. When you look at the disc, on its face it looks like oh, there's not much benefit here, we're only making 2% or 3% of sales on our bottom line. So our disc commission would be 2% or 3% of sales. But, like I said, with the transactional approach, if the commission approach is 15%, well now we've taken the company into a tax loss which could potentially save additional taxes for the owners over and above that 5.8%, because now we're offsetting that loss against other income wages, interest, et cetera and being taxed just on the qualified dividend income of the disc. And so you can't just look at the overall margin or overall profitability of the company and project what that, what it's going to look like, Because they vary all over the place. Dave: Based on this transactional approach, yeah, and I would like to talk a bit about. Oftentimes, when I'm talking to a company that's considering a disk, oftentimes they've never even heard of it. Their CPA firm may not have even mentioned the idea. And they'll say, and they'll ask me hey, does this mean my CPA, you know, screwed up by not telling me about it. In my response, you know I try to be generous and I explain it that, look, you know, in our experience only about one out of 100 companies are a candidate. And so let's just say you have a large local CPA firm and they have 100, you know midsize corporate clients. Statistically we find that only one of them, you know, would be a fit for the disk. And your experience may be a little different, you know, feel free to correct me. And so when you think about it from the CPA's perspective, if there's a special part of the tax code and they only have one client that benefits, it's a difficult economic dynamic for the CPA firm to invest in a whole team and expertise to serve one client, right? Isn't that like part of the challenge that the and I know you've worked at a number of large CPA firms Is my understanding correct? That's part of the problem is just their clientele. There aren't enough of them. That makes it worth doing yeah. Brian: Yeah, I think that's a fair characterization. I might phrase it a little bit differently. I mean, there are thousands of CPA firms and they're all excellent generalists. This is not an area where you can be a generalist. Cpa firms often outsource R&D, tax credit work, cost segregation work. This, to me, falls right in that same category. You don't want to dabble in this, and if you're not sure what you're doing, you can get you and your client in trouble. Have good intentions, but if you don't execute it properly, it can be more of a headache than it's worth. And so, like most people, I think people gravitate towards what they know and understand, and things that they don't know and understand can look and sound scary. Dave: Yeah. Brian: So it's like, oh my God, an IC disc. I've never heard of that. I'm not sure I can bring that to my client because I don't really know what I'm doing. Well, I wish I knew somebody I could call to him. He's not a competitor right who could help me through this and help my client through this, and so that's really one of the reasons why we exist, because, as you stated, you don't want it to be a competitor that you call, and so, because we are so hyper focused on what we do and we don't do the things that I'll call the cpa's generalists, that the generalists do, we're an excellent partner because we're not looking to take away anybody's tax return or any of the other type of work that the CPA might be doing for that client. We just want to play in our space. Dave: Yeah, sometimes I'm sorry. Sometimes you know clients or potential clients will say, yeah, but you know our CPA firm does. You know all of our work. It's a one-stop shop thing and I'm afraid having you do the disc return and then doing the corporate return yeah, but our CPA firm does all of our work, it's a one-stop shop thing and I'm afraid having you do the disc return and then doing the corporate return it's just going to be a nightmare for you all to coordinate your efforts. It just sounds like too much trouble. What would your response be to that? Brian: My response is I work with over 500 companies. Generally we do the disk work for those companies. The regular mainstream CPA does everything else. We coordinate our work with that CPA and it's never a problem. We say, look, we're going to need X number of days to turn this around, so please have a draft of the operating company return by a particular date, and then they work towards that date. They give us the return, we get data from the company and we turn the number around so they can finish their tax return and then we go ahead and finish the disc return and I would say 99.9% of the time it works like we're all part of the same thing. Dave: Yeah, because really the CPA they prepare that final draft corporate return. They then pull two numbers from the disk return that goes into the corporate return and then they're done, basically right. Brian: And they're done and they can go ahead and finish up their disk return, I mean their operating company return and their state returns and everything. And then we just have to get the disc return done. And sometimes you know they file their tax return in april and you know the disc returns aren't due till september. So one might say, oh, you could just sit on them until september. But you know, we try to get them done at the same time. Sure sure Everybody can rest easy. But I mean we think of ourselves as a bolt-on resource to that CPA firm while we're working with that and we work with probably 50 to 75 CPA firms around the country in that role- yeah. It works well. I mean, you can talk to any one of them about what it's like to work with us, and I'm sure you'd get a glowing recommendation for how we work with them and for their clients. Dave: Yeah, no, I'm with you. So, as we're nearing the end here, the other thing that people find interesting you'd mentioned in 2003, there were 700 IC disks under 1,000. Yeah, 787. And then, according, if my recollection is correct, the most recent IRS stats that updated that were published, I think, in 2010. And I believe in 2010, there were like 2000 disks. Brian: Yeah, something like 1926. Okay, To be exact, and that number I'm sure has grown dramatically since then. I would guess there's somewhere between eight and 10,000 disks out there now. Okay, yeah. Dave: Yeah, now what's interesting? This is what people find interesting. I believe there's about 50 million business organization, you know business entities in the country, and so let's just assume that's the number, 50 million. Brian: I mean it's tens of millions. Dave: I'm certain of that. For some reason, I think it's 50 million. Does that sound reasonable? Brian: It does so let's think it's 50 million, does that? Dave: sound reasonable. It does. So let's say it's 50 million and on your average, you know we find around one out of a hundred. You know, maybe one out of 200 companies are fit for the disc. So if we run through the math, you know one percent of 50 million, I believe, is 500, 000. You know approximate companies that we think would benefit from a disc. Yet most recent stats, there's only 2000, you know, and maybe it's 4,000, 6,000, you know. Even, let's say it's 10,000 that exists now. So if you divide 10,000 by 500,000, what is that? Like 2%, I think, of the projected eligible company actually have a disc yeah, and people can't. They always are surprised by that and I usually tell them it might. And tell me if your numbers are consistent. I say about 100. One out of 100 benefit or could benefit. The ones who could benefit 90 percent of them have never heard of the disc, maybe 95%, and the 5% of the 1% who have heard of it, even once they hear about it, they usually haven't implemented it. Brian: Right. Then there's a percent that have implemented it. They're not getting out of it what they can. Dave: Right right. Brian: So it's so. There's a lot of missed opportunities by taxpayers and everyone's always trying to save some taxes. It helps fun, you know. It might help hire another employee might help, you know, if the savings are moderate and it's 50, 6070, 1000 of tax savings that still could pay for an employee to come work at the company. Why do? Dave: you think that utilization is so low? I mean because it'd be shocking if only 2% of the companies who did research and development took advantage of the RMD tax credit. Brian: I think it's just not well known. I mean it's very esoteric, it's been in the tax code for ages and ages and it just doesn't you. You know, there were so many years where it just wasn't relevant when you think that it's not something people think about. And then if you know, if you're a small exporter and you're exporting a half a million dollars a year a million dollars a year unfortunately it probably doesn't benefit you to have a disc and so maybe someone will look at it whether that size and they're like, oh yeah, it doesn't benefit you to have a disk and so maybe someone will look at it whether that size and they're like, oh yeah, it doesn't work. And then they grow and they forget that it might work once they've grown. So once a company hits about three million of export sales really should look at it again, because that's where it starts to have economic relevance that's where it starts to have economic relevance. Dave: Do you think some of it could be that? I mean, in general, public companies don't use disks, right? Brian: They just simply don't. Dave: Okay, and so I've found that oftentimes small to mid-sized privately held companies receive a lot of their sophisticated business knowledge from their Fortune 500 suppliers or clients. You know they'll hear from them about something and you know, like the payroll protection program during COVID, you know I suspect some of those might have heard about that from you know some of their large customers. Maybe that's not a good example, but you know that could be another reason. Right, there's just a dearth of knowledge that the CPAs aren't focused on it because the economics don't make sense. The large sophisticated public suppliers and clients don't use it, so they don't hear about it from them. Right, it's not really in the news, it's just. It just kind of flies below the radar screen, doesn't it? Brian: It definitely does, and that's certainly a reason why it's not as utilized as it probably could be. Dave: Yeah, and it seems like you know most of our, you know virtually all of our clients come as a referral from either an existing client or an advisor who we've worked with other clients you know, like a CPA or attorney or banker. So yeah, it's just a yeah, even though you know the podcast is called the Icy Disc Show. I don't get the sense that I'm ever going to. You know, reach Joe Rogan's audience size. It just seems to kind of fly below the radar screen. Brian: Yeah, and the potential audience is probably a little smaller than Joe's. Dave: Probably Well. So the last thing, the other thing people tell me they're surprised about the first year of the disk return. When they set up a disk is to get everything done. And we tell them the disk return's ready and they say, super good, and e-file it for me, like the CPA does the corporate and personal returns. And what is our response when they tell us to go e-file it for them? Brian: The response is unfortunately, the IRS doesn't provide for e-filing of disk returns and we'll need to send you a paper return. You're going to need to sign it and file it with the IRS and the unfortunate thing there is gosh, I don't know what percent of the time, but it's a growing percentage of the time the IRS loses the return Right and then sends a notice saying, hey, we never filed or whatever. And some of these disk returns are quite large. The fact that they because when you do the transaction by transaction analysis, there's a lot of paper that gets produced and filed and it's shocking to me that the IRS would lose those what they do. Dave: So it's interesting what they do. So it's interesting. I like to say that not only does the ICDISC fly under the radar screen of most everything, it even, in some ways, it's almost like it flies under the radar screen of the IRS itself. Brian: Yeah, and they put some things in place with regard to the ICDISC in 1984 and have never changed it. For example, if you're in the situation where you have to pay interest on deferred tax, which often occurs. First of all, a lot of times taxpayers don't realize it and they don't do it. Secondly, if they do it. It's so antiquated that the instructions to the form where you calculate the interest it says please staple a check to this form and mail it in. I mean, who does that in 2020, right? Nobody. People, businesses prefer to do things electronically to avoid checks being stolen, fraudulent activity, so on and so forth. But here the IRS is saying staple a check to this form and mail it to Kansas City, missouri. Dave: Yeah, and I guess it kind of makes sense that you know if there's only a few thousand of these disks in existence. In the same way, you can't expect the CPA firms to make it a heavy focus, I suppose even the IRS. You know there's a hundred other tax incentives or a thousand other tax incentives that are more highly utilized that you know they maybe are spending their time on. Brian: Yeah, as I like to say, the people at the IRS that understood the disc were working there in the 70s and 80s, OK, and they're long retired. Yeah, and they're long retired. There's really not a lot of bodies at the IRS that understand the DISC and certainly when you're doing a transaction by transaction study and calculating the commission on each individual transaction, there's nobody there that understands that. Dave: Nobody Well, and it's kind of the same thing outside the IRS, right? Nobody Well, and it's kind of the same thing outside the IRS, right? I mean I have this joke that nobody makes partner at a big four firm being the IC disk expert. Oh, that's true, so it even especially nowadays. Yeah, and so it seems like like the average age of IC disks experts is about the same as the average age of the average Fortran computer language programmer. It just seems like you know new people are not coming into the disk and there's just a dearth of knowledge all around. Brian: Right, right. And I myself learned COBOL, which is a choice between Fortran and COBOL, when I was in business school, both equally non-usable. Dave: Is it part of that? Because since the disk came on in 1972, it seems like since 1973, people have been talking about the IC disk going away. So is that maybe part of it? People think, well, why should I learn something if it's going away? Brian: Maybe part of it. People think, well, why should I learn something if it's going away? There's always been a fear that it's either going to go away or that there's a technical correction coming that the disk dividend is not a qualified dividend. But the bottom line is politically, I just don't see that happening. Dave: It stands for too many things that are positive for the US Job creation export sales for too many things that are positive for the US Job creation, export sales, us companies being more competitive in the global market. Brian: So it doesn't really lend itself to be repealed. What can be repealed are some of the tax rates. Some of the tax rates can change and that can change the benefits of the disc. The concept of the disc itself and what it stands for really is very consistent with our country. Dave: Yeah, wow, I can't believe how the time has flown by, brian. Is there anything else that you want to mention about the IC disc or the MRO industry? Brian: No, I can't think of anything specifically other than I'm looking forward to being there and meeting many of the attendees and other exhibitors that are there and spending some time with you and our colleagues in Atlanta. Dave: Yeah, it will be fun. So it's the ICDISC Alliance. If you want to look us up on the website for the conference or stop by 1818BC. We also have a LinkedIn page for the ICDISC Alliance, and so I'd love to meet with any of you who are going to be at the conference. Awesome, well, thank you very much for your time, Brian. This has been really useful. Brian: You're welcome. You're very welcome. Special Guest: Brian Schwam.

Due to overwhelming demand (>15x applications:slots), we are closing CFPs for AI Engineer Summit NYC today. Last call! Thanks, we'll be reaching out to all shortly!The world's top AI blogger and friend of every pod, Simon Willison, dropped a monster 2024 recap: Things we learned about LLMs in 2024. Brian of the excellent TechMeme Ride Home pinged us for a connection and a special crossover episode, our first in 2025. The target audience for this podcast is a tech-literate, but non-technical one. You can see Simon's notes for AI Engineers in his World's Fair Keynote.Timestamp* 00:00 Introduction and Guest Welcome* 01:06 State of AI in 2025* 01:43 Advancements in AI Models* 03:59 Cost Efficiency in AI* 06:16 Challenges and Competition in AI* 17:15 AI Agents and Their Limitations* 26:12 Multimodal AI and Future Prospects* 35:29 Exploring Video Avatar Companies* 36:24 AI Influencers and Their Future* 37:12 Simplifying Content Creation with AI* 38:30 The Importance of Credibility in AI* 41:36 The Future of LLM User Interfaces* 48:58 Local LLMs: A Growing Interest* 01:07:22 AI Wearables: The Next Big Thing* 01:10:16 Wrapping Up and Final ThoughtsTranscript[00:00:00] Introduction and Guest Welcome[00:00:00] Brian: Welcome to the first bonus episode of the Tech Meme Write Home for the year 2025. I'm your host as always, Brian McCullough. Listeners to the pod over the last year know that I have made a habit of quoting from Simon Willison when new stuff happens in AI from his blog. Simon has been, become a go to for many folks in terms of, you know, Analyzing things, criticizing things in the AI space.[00:00:33] Brian: I've wanted to talk to you for a long time, Simon. So thank you for coming on the show. No, it's a privilege to be here. And the person that made this connection happen is our friend Swyx, who has been on the show back, even going back to the, the Twitter Spaces days but also an AI guru in, in their own right Swyx, thanks for coming on the show also.[00:00:54] swyx (2): Thanks. I'm happy to be on and have been a regular listener, so just happy to [00:01:00] contribute as well.[00:01:00] Brian: And a good friend of the pod, as they say. Alright, let's go right into it.[00:01:06] State of AI in 2025[00:01:06] Brian: Simon, I'm going to do the most unfair, broad question first, so let's get it out of the way. The year 2025. Broadly, what is the state of AI as we begin this year?[00:01:20] Brian: Whatever you want to say, I don't want to lead the witness.[00:01:22] Simon: Wow. So many things, right? I mean, the big thing is everything's got really good and fast and cheap. Like, that was the trend throughout all of 2024. The good models got so much cheaper, they got so much faster, they got multimodal, right? The image stuff isn't even a surprise anymore.[00:01:39] Simon: They're growing video, all of that kind of stuff. So that's all really exciting.[00:01:43] Advancements in AI Models[00:01:43] Simon: At the same time, they didn't get massively better than GPT 4, which was a bit of a surprise. So that's sort of one of the open questions is, are we going to see huge, but I kind of feel like that's a bit of a distraction because GPT 4, but way cheaper, much larger context lengths, and it [00:02:00] can do multimodal.[00:02:01] Simon: is better, right? That's a better model, even if it's not.[00:02:05] Brian: What people were expecting or hoping, maybe not expecting is not the right word, but hoping that we would see another step change, right? Right. From like GPT 2 to 3 to 4, we were expecting or hoping that maybe we were going to see the next evolution in that sort of, yeah.[00:02:21] Brian: We[00:02:21] Simon: did see that, but not in the way we expected. We thought the model was just going to get smarter, and instead we got. Massive drops in, drops in price. We got all of these new capabilities. You can talk to the things now, right? They can do simulated audio input, all of that kind of stuff. And so it's kind of, it's interesting to me that the models improved in all of these ways we weren't necessarily expecting.[00:02:43] Simon: I didn't know it would be able to do an impersonation of Santa Claus, like a, you know, Talked to it through my phone and show it what I was seeing by the end of 2024. But yeah, we didn't get that GPT 5 step. And that's one of the big open questions is, is that actually just around the corner and we'll have a bunch of GPT 5 class models drop in the [00:03:00] next few months?[00:03:00] Simon: Or is there a limit?[00:03:03] Brian: If you were a betting man and wanted to put money on it, do you expect to see a phase change, step change in 2025?[00:03:11] Simon: I don't particularly for that, like, the models, but smarter. I think all of the trends we're seeing right now are going to keep on going, especially the inference time compute, right?[00:03:21] Simon: The trick that O1 and O3 are doing, which means that you can solve harder problems, but they cost more and it churns away for longer. I think that's going to happen because that's already proven to work. I don't know. I don't know. Maybe there will be a step change to a GPT 5 level, but honestly, I'd be completely happy if we got what we've got right now.[00:03:41] Simon: But cheaper and faster and more capabilities and longer contexts and so forth. That would be thrilling to me.[00:03:46] Brian: Digging into what you've just said one of the things that, by the way, I hope to link in the show notes to Simon's year end post about what, what things we learned about LLMs in 2024. Look for that in the show notes.[00:03:59] Cost Efficiency in AI[00:03:59] Brian: One of the things that you [00:04:00] did say that you alluded to even right there was that in the last year, you felt like the GPT 4 barrier was broken, like IE. Other models, even open source ones are now regularly matching sort of the state of the art.[00:04:13] Simon: Well, it's interesting, right? So the GPT 4 barrier was a year ago, the best available model was OpenAI's GPT 4 and nobody else had even come close to it.[00:04:22] Simon: And they'd been at the, in the lead for like nine months, right? That thing came out in what, February, March of, of 2023. And for the rest of 2023, nobody else came close. And so at the start of last year, like a year ago, the big question was, Why has nobody beaten them yet? Like, what do they know that the rest of the industry doesn't know?[00:04:40] Simon: And today, that I've counted 18 organizations other than GPT 4 who've put out a model which clearly beats that GPT 4 from a year ago thing. Like, maybe they're not better than GPT 4. 0, but that's, that, that, that barrier got completely smashed. And yeah, a few of those I've run on my laptop, which is wild to me.[00:04:59] Simon: Like, [00:05:00] it was very, very wild. It felt very clear to me a year ago that if you want GPT 4, you need a rack of 40, 000 GPUs just to run the thing. And that turned out not to be true. Like the, the, this is that big trend from last year of the models getting more efficient, cheaper to run, just as capable with smaller weights and so forth.[00:05:20] Simon: And I ran another GPT 4 model on my laptop this morning, right? Microsoft 5. 4 just came out. And that, if you look at the benchmarks, it's definitely, it's up there with GPT 4. 0. It's probably not as good when you actually get into the vibes of the thing, but it, it runs on my, it's a 14 gigabyte download and I can run it on a MacBook Pro.[00:05:38] Simon: Like who saw that coming? The most exciting, like the close of the year on Christmas day, just a few weeks ago, was when DeepSeek dropped their DeepSeek v3 model on Hugging Face without even a readme file. It was just like a giant binary blob that I can't run on my laptop. It's too big. But in all of the benchmarks, it's now by far the best available [00:06:00] open, open weights model.[00:06:01] Simon: Like it's, it's, it's beating the, the metalamas and so forth. And that was trained for five and a half million dollars, which is a tenth of the price that people thought it costs to train these things. So everything's trending smaller and faster and more efficient.[00:06:15] Brian: Well, okay.[00:06:16] Challenges and Competition in AI[00:06:16] Brian: I, I kind of was going to get to that later, but let's, let's combine this with what I was going to ask you next, which is, you know, you're talking, you know, Also in the piece about the LLM prices crashing, which I've even seen in projects that I'm working on, but explain Explain that to a general audience, because we hear all the time that LLMs are eye wateringly expensive to run, but what we're suggesting, and we'll come back to the cheap Chinese LLM, but first of all, for the end user, what you're suggesting is that we're starting to see the cost come down sort of in the traditional technology way of Of costs coming down over time,[00:06:49] Simon: yes, but very aggressively.[00:06:51] Simon: I mean, my favorite thing, the example here is if you look at GPT-3, so open AI's g, PT three, which was the best, a developed model in [00:07:00] 2022 and through most of 20 2023. That, the models that we have today, the OpenAI models are a hundred times cheaper. So there was a 100x drop in price for OpenAI from their best available model, like two and a half years ago to today.[00:07:13] Simon: And[00:07:14] Brian: just to be clear, not to train the model, but for the use of tokens and things. Exactly,[00:07:20] Simon: for running prompts through them. And then When you look at the, the really, the top tier model providers right now, I think, are OpenAI, Anthropic, Google, and Meta. And there are a bunch of others that I could list there as well.[00:07:32] Simon: Mistral are very good. The, the DeepSeq and Quen models have got great. There's a whole bunch of providers serving really good models. But even if you just look at the sort of big brand name providers, they all offer models now that are A fraction of the price of the, the, of the models we were using last year.[00:07:49] Simon: I think I've got some numbers that I threw into my blog entry here. Yeah. Like Gemini 1. 5 flash, that's Google's fast high quality model is [00:08:00] how much is that? It's 0. 075 dollars per million tokens. Like these numbers are getting, So we just do cents per million now,[00:08:09] swyx (2): cents per million,[00:08:10] Simon: cents per million makes, makes a lot more sense.[00:08:12] Simon: Yeah they have one model 1. 5 flash 8B, the absolute cheapest of the Google models, is 27 times cheaper than GPT 3. 5 turbo was a year ago. That's it. And GPT 3. 5 turbo, that was the cheap model, right? Now we've got something 27 times cheaper, and the Google, this Google one can do image recognition, it can do million token context, all of those tricks.[00:08:36] Simon: But it's, it's, it's very, it's, it really is startling how inexpensive some of this stuff has got.[00:08:41] Brian: Now, are we assuming that this, that happening is directly the result of competition? Because again, you know, OpenAI, and probably they're doing this for their own almost political reasons, strategic reasons, keeps saying, we're losing money on everything, even the 200.[00:08:56] Brian: So they probably wouldn't, the prices wouldn't be [00:09:00] coming down if there wasn't intense competition in this space.[00:09:04] Simon: The competition is absolutely part of it, but I have it on good authority from sources I trust that Google Gemini is not operating at a loss. Like, the amount of electricity to run a prompt is less than they charge you.[00:09:16] Simon: And the same thing for Amazon Nova. Like, somebody found an Amazon executive and got them to say, Yeah, we're not losing money on this. I don't know about Anthropic and OpenAI, but clearly that demonstrates it is possible to run these things at these ludicrously low prices and still not be running at a loss if you discount the Army of PhDs and the, the training costs and all of that kind of stuff.[00:09:36] Brian: One, one more for me before I let Swyx jump in here. To, to come back to DeepSeek and this idea that you could train, you know, a cutting edge model for 6 million. I, I was saying on the show, like six months ago, that if we are getting to the point where each new model It would cost a billion, ten billion, a hundred billion to train that.[00:09:54] Brian: At some point it would almost, only nation states would be able to train the new models. Do you [00:10:00] expect what DeepSeek and maybe others are proving to sort of blow that up? Or is there like some sort of a parallel track here that maybe I'm not technically, I don't have the mouse to understand the difference.[00:10:11] Brian: Is the model, are the models going to go, you know, Up to a hundred billion dollars or can we get them down? Sort of like DeepSeek has proven[00:10:18] Simon: so I'm the wrong person to answer that because I don't work in the lab training these models. So I can give you my completely uninformed opinion, which is, I felt like the DeepSeek thing.[00:10:27] Simon: That was a bomb shell. That was an absolute bombshell when they came out and said, Hey, look, we've trained. One of the best available models and it cost us six, five and a half million dollars to do it. I feel, and they, the reason, one of the reasons it's so efficient is that we put all of these export controls in to stop Chinese companies from giant buying GPUs.[00:10:44] Simon: So they've, were forced to be, go as efficient as possible. And yet the fact that they've demonstrated that that's possible to do. I think it does completely tear apart this, this, this mental model we had before that yeah, the training runs just keep on getting more and more expensive and the number of [00:11:00] organizations that can afford to run these training runs keeps on shrinking.[00:11:03] Simon: That, that's been blown out of the water. So yeah, that's, again, this was our Christmas gift. This was the thing they dropped on Christmas day. Yeah, it makes me really optimistic that we can, there are, It feels like there was so much low hanging fruit in terms of the efficiency of both inference and training and we spent a whole bunch of last year exploring that and getting results from it.[00:11:22] Simon: I think there's probably a lot left. I think there's probably, well, I would not be surprised to see even better models trained spending even less money over the next six months.[00:11:31] swyx (2): Yeah. So I, I think there's a unspoken angle here on what exactly the Chinese labs are trying to do because DeepSea made a lot of noise.[00:11:41] swyx (2): so much for joining us for around the fact that they train their model for six million dollars and nobody quite quite believes them. Like it's very, very rare for a lab to trumpet the fact that they're doing it for so cheap. They're not trying to get anyone to buy them. So why [00:12:00] are they doing this? They make it very, very obvious.[00:12:05] swyx (2): Deepseek is about 150 employees. It's an order of magnitude smaller than at least Anthropic and maybe, maybe more so for OpenAI. And so what's, what's the end game here? Are they, are they just trying to show that the Chinese are better than us?[00:12:21] Simon: So Deepseek, it's the arm of a hedge, it's a, it's a quant fund, right?[00:12:25] Simon: It's an algorithmic quant trading thing. So I, I, I would love to get more insight into how that organization works. My assumption from what I've seen is it looks like they're basically just flexing. They're like, hey, look at how utterly brilliant we are with this amazing thing that we've done. And it's, it's working, right?[00:12:43] Simon: They but, and so is that it? Are they, is this just their kind of like, this is, this is why our company is so amazing. Look at this thing that we've done, or? I don't know. I'd, I'd love to get Some insight from, from within that industry as to, as to how that's all playing out.[00:12:57] swyx (2): The, the prevailing theory among the Local Llama [00:13:00] crew and the Twitter crew that I indexed for my newsletter is that there is some amount of copying going on.[00:13:06] swyx (2): It's like Sam Altman you know, tweet, tweeting about how they're being copied. And then also there's this, there, there are other sort of opening eye employees that have said, Stuff that is similar that DeepSeek's rate of progress is how U. S. intelligence estimates the number of foreign spies embedded in top labs.[00:13:22] swyx (2): Because a lot of these ideas do spread around, but they surprisingly have a very high density of them in the DeepSeek v3 technical report. So it's, it's interesting. We don't know how much, how many, how much tokens. I think that, you know, people have run analysis on how often DeepSeek thinks it is cloud or thinks it is opening GPC 4.[00:13:40] swyx (2): Thanks for watching! And we don't, we don't know. We don't know. I think for me, like, yeah, we'll, we'll, we basically will never know as, as external commentators. I think what's interesting is how, where does this go? Is there a logical floor or bottom by my estimations for the same amount of ELO started last year to the end of last year cost went down by a thousand X for the [00:14:00] GPT, for, for GPT 4 intelligence.[00:14:02] swyx (2): Would, do they go down a thousand X this year?[00:14:04] Simon: That's a fascinating question. Yeah.[00:14:06] swyx (2): Is there a Moore's law going on, or did we just get a one off benefit last year for some weird reason?[00:14:14] Simon: My uninformed hunch is low hanging fruit. I feel like up until a year ago, people haven't been focusing on efficiency at all. You know, it was all about, what can we get these weird shaped things to do?[00:14:24] Simon: And now once we've sort of hit that, okay, we know that we can get them to do what GPT 4 can do, When thousands of researchers around the world all focus on, okay, how do we make this more efficient? What are the most important, like, how do we strip out all of the weights that have stuff in that doesn't really matter?[00:14:39] Simon: All of that kind of thing. So yeah, maybe that was it. Maybe 2024 was a freak year of all of the low hanging fruit coming out at once. And we'll actually see a reduction in the, in that rate of improvement in terms of efficiency. I wonder, I mean, I think we'll know for sure in about three months time if that trend's going to continue or not.[00:14:58] swyx (2): I agree. You know, I [00:15:00] think the other thing that you mentioned that DeepSeq v3 was the gift that was given from DeepSeq over Christmas, but I feel like the other thing that might be underrated was DeepSeq R1,[00:15:11] Speaker 4: which is[00:15:13] swyx (2): a reasoning model you can run on your laptop. And I think that's something that a lot of people are looking ahead to this year.[00:15:18] swyx (2): Oh, did they[00:15:18] Simon: release the weights for that one?[00:15:20] swyx (2): Yeah.[00:15:21] Simon: Oh my goodness, I missed that. I've been playing with the quen. So the other great, the other big Chinese AI app is Alibaba's quen. Actually, yeah, I, sorry, R1 is an API available. Yeah. Exactly. When that's really cool. So Alibaba's Quen have released two reasoning models that I've run on my laptop.[00:15:38] Simon: Now there was, the first one was Q, Q, WQ. And then the second one was QVQ because the second one's a vision model. So you can like give it vision puzzles and a prompt that these things, they are so much fun to run. Because they think out loud. It's like the OpenAR 01 sort of hides its thinking process. The Query ones don't.[00:15:59] Simon: They just, they [00:16:00] just churn away. And so you'll give it a problem and it will output literally dozens of paragraphs of text about how it's thinking. My favorite thing that happened with QWQ is I asked it to draw me a pelican on a bicycle in SVG. That's like my standard stupid prompt. And for some reason it thought in Chinese.[00:16:18] Simon: It spat out a whole bunch of like Chinese text onto my terminal on my laptop, and then at the end it gave me quite a good sort of artistic pelican on a bicycle. And I ran it all through Google Translate, and yeah, it was like, it was contemplating the nature of SVG files as a starting point. And the fact that my laptop can think in Chinese now is so delightful.[00:16:40] Simon: It's so much fun watching you do that.[00:16:43] swyx (2): Yeah, I think Andrej Karpathy was saying, you know, we, we know that we have achieved proper reasoning inside of these models when they stop thinking in English, and perhaps the best form of thought is in Chinese. But yeah, for listeners who don't know Simon's blog he always, whenever a new model comes out, you, I don't know how you do it, but [00:17:00] you're always the first to run Pelican Bench on these models.[00:17:02] swyx (2): I just did it for 5.[00:17:05] Simon: Yeah.[00:17:07] swyx (2): So I really appreciate that. You should check it out. These are not theoretical. Simon's blog actually shows them.[00:17:12] Brian: Let me put on the investor hat for a second.[00:17:15] AI Agents and Their Limitations[00:17:15] Brian: Because from the investor side of things, a lot of the, the VCs that I know are really hot on agents, and this is the year of agents, but last year was supposed to be the year of agents as well. Lots of money flowing towards, And Gentic startups.[00:17:32] Brian: But in in your piece that again, we're hopefully going to have linked in the show notes, you sort of suggest there's a fundamental flaw in AI agents as they exist right now. Let me let me quote you. And then I'd love to dive into this. You said, I remain skeptical as to their ability based once again, on the Challenge of gullibility.[00:17:49] Brian: LLMs believe anything you tell them, any systems that attempt to make meaningful decisions on your behalf, will run into the same roadblock. How good is a travel agent, or a digital assistant, or even a research tool, if it [00:18:00] can't distinguish truth from fiction? So, essentially, what you're suggesting is that the state of the art now that allows agents is still, it's still that sort of 90 percent problem, the edge problem, getting to the Or, or, or is there a deeper flaw?[00:18:14] Brian: What are you, what are you saying there?[00:18:16] Simon: So this is the fundamental challenge here and honestly my frustration with agents is mainly around definitions Like any if you ask anyone who says they're working on agents to define agents You will get a subtly different definition from each person But everyone always assumes that their definition is the one true one that everyone else understands So I feel like a lot of these agent conversations, people talking past each other because one person's talking about the, the sort of travel agent idea of something that books things on your behalf.[00:18:41] Simon: Somebody else is talking about LLMs with tools running in a loop with a cron job somewhere and all of these different things. You, you ask academics and they'll laugh at you because they've been debating what agents mean for over 30 years at this point. It's like this, this long running, almost sort of an in joke in that community.[00:18:57] Simon: But if we assume that for this purpose of this conversation, an [00:19:00] agent is something that, Which you can give a job and it goes off and it does that thing for you like, like booking travel or things like that. The fundamental challenge is, it's the reliability thing, which comes from this gullibility problem.[00:19:12] Simon: And a lot of my, my interest in this originally came from when I was thinking about prompt injections as a source of this form of attack against LLM systems where you deliberately lay traps out there for this LLM to stumble across,[00:19:24] Brian: and which I should say you have been banging this drum that no one's gotten any far, at least on solving this, that I'm aware of, right.[00:19:31] Brian: Like that's still an open problem. The two years.[00:19:33] Simon: Yeah. Right. We've been talking about this problem and like, a great illustration of this was Claude so Anthropic released Claude computer use a few months ago. Fantastic demo. You could fire up a Docker container and you could literally tell it to do something and watch it open a web browser and navigate to a webpage and click around and so forth.[00:19:51] Simon: Really, really, really interesting and fun to play with. And then, um. One of the first demos somebody tried was, what if you give it a web page that says download and run this [00:20:00] executable, and it did, and the executable was malware that added it to a botnet. So the, the very first most obvious dumb trick that you could play on this thing just worked, right?[00:20:10] Simon: So that's obviously a really big problem. If I'm going to send something out to book travel on my behalf, I mean, it's hard enough for me to figure out which airlines are trying to scam me and which ones aren't. Do I really trust a language model that believes the literal truth of anything that's presented to it to go out and do those things?[00:20:29] swyx (2): Yeah I definitely think there's, it's interesting to see Anthropic doing this because they used to be the safety arm of OpenAI that split out and said, you know, we're worried about letting this thing out in the wild and here they are enabling computer use for agents. Thanks. The, it feels like things have merged.[00:20:49] swyx (2): You know, I'm, I'm also fairly skeptical about, you know, this always being the, the year of Linux on the desktop. And this is the equivalent of this being the year of agents that people [00:21:00] are not predicting so much as wishfully thinking and hoping and praying for their companies and agents to work.[00:21:05] swyx (2): But I, I feel like things are. Coming along a little bit. It's to me, it's kind of like self driving. I remember in 2014 saying that self driving was just around the corner. And I mean, it kind of is, you know, like in, in, in the Bay area. You[00:21:17] Simon: get in a Waymo and you're like, Oh, this works. Yeah, but it's a slow[00:21:21] swyx (2): cook.[00:21:21] swyx (2): It's a slow cook over the next 10 years. We're going to hammer out these things and the cynical people can just point to all the flaws, but like, there are measurable or concrete progress steps that are being made by these builders.[00:21:33] Simon: There is one form of agent that I believe in. I believe, mostly believe in the research assistant form of agents.[00:21:39] Simon: The thing where you've got a difficult problem and, and I've got like, I'm, I'm on the beta for the, the Google Gemini 1. 5 pro with deep research. I think it's called like these names, these names. Right. But. I've been using that. It's good, right? You can give it a difficult problem and it tells you, okay, I'm going to look at 56 different websites [00:22:00] and it goes away and it dumps everything to its context and it comes up with a report for you.[00:22:04] Simon: And it's not, it won't work against adversarial websites, right? If there are websites with deliberate lies in them, it might well get caught out. Most things don't have that as a problem. And so I've had some answers from that which were genuinely really valuable to me. And that feels to me like, I can see how given existing LLM tech, especially with Google Gemini with its like million token contacts and Google with their crawl of the entire web and their, they've got like search, they've got search and cache, they've got a cache of every page and so forth.[00:22:35] Simon: That makes sense to me. And that what they've got right now, I don't think it's, it's not as good as it can be, obviously, but it's, it's, it's, it's a real useful thing, which they're going to start rolling out. So, you know, Perplexity have been building the same thing for a couple of years. That, that I believe in.[00:22:50] Simon: You know, if you tell me that you're going to have an agent that's a research assistant agent, great. The coding agents I mean, chat gpt code interpreter, Nearly two years [00:23:00] ago, that thing started writing Python code, executing the code, getting errors, rewriting it to fix the errors. That pattern obviously works.[00:23:07] Simon: That works really, really well. So, yeah, coding agents that do that sort of error message loop thing, those are proven to work. And they're going to keep on getting better, and that's going to be great. The research assistant agents are just beginning to get there. The things I'm critical of are the ones where you trust, you trust this thing to go out and act autonomously on your behalf, and make decisions on your behalf, especially involving spending money, like that.[00:23:31] Simon: I don't see that working for a very long time. That feels to me like an AGI level problem.[00:23:37] swyx (2): It's it's funny because I think Stripe actually released an agent toolkit which is one of the, the things I featured that is trying to enable these agents each to have a wallet that they can go and spend and have, basically, it's a virtual card.[00:23:49] swyx (2): It's not that, not that difficult with modern infrastructure. can[00:23:51] Simon: stick a 50 cap on it, then at least it's an honor. Can't lose more than 50.[00:23:56] Brian: You know I don't, I don't know if either of you know Rafat Ali [00:24:00] he runs Skift, which is a, a travel news vertical. And he, he, he constantly laughs at the fact that every agent thing is, we're gonna get rid of booking a, a plane flight for you, you know?[00:24:11] Brian: And, and I would point out that, like, historically, when the web started, the first thing everyone talked about is, You can go online and book a trip, right? So it's funny for each generation of like technological advance. The thing they always want to kill is the travel agent. And now they want to kill the webpage travel agent.[00:24:29] Simon: Like it's like I use Google flight search. It's great, right? If you gave me an agent to do that for me, it would save me, I mean, maybe 15 seconds of typing in my things, but I still want to see what my options are and go, yeah, I'm not flying on that airline, no matter how cheap they are.[00:24:44] swyx (2): Yeah. For listeners, go ahead.[00:24:47] swyx (2): For listeners, I think, you know, I think both of you are pretty positive on NotebookLM. And you know, we, we actually interviewed the NotebookLM creators, and there are actually two internal agents going on internally. The reason it takes so long is because they're running an agent loop [00:25:00] inside that is fairly autonomous, which is kind of interesting.[00:25:01] swyx (2): For one,[00:25:02] Simon: for a definition of agent loop, if you picked that particularly well. For one definition. And you're talking about the podcast side of this, right?[00:25:07] swyx (2): Yeah, the podcast side of things. They have a there's, there's going to be a new version coming out that, that we'll be featuring at our, at our conference.[00:25:14] Simon: That one's fascinating to me. Like NotebookLM, I think it's two products, right? On the one hand, it's actually a very good rag product, right? You dump a bunch of things in, you can run searches, that, that, it does a good job of. And then, and then they added the, the podcast thing. It's a bit of a, it's a total gimmick, right?[00:25:30] Simon: But that gimmick got them attention, because they had a great product that nobody paid any attention to at all. And then you add the unfeasibly good voice synthesis of the podcast. Like, it's just, it's, it's, it's the lesson.[00:25:43] Brian: It's the lesson of mid journey and stuff like that. If you can create something that people can post on socials, you don't have to lift a finger again to do any marketing for what you're doing.[00:25:53] Brian: Let me dig into Notebook LLM just for a second as a podcaster. As a [00:26:00] gimmick, it makes sense, and then obviously, you know, you dig into it, it sort of has problems around the edges. It's like, it does the thing that all sort of LLMs kind of do, where it's like, oh, we want to Wrap up with a conclusion.[00:26:12] Multimodal AI and Future Prospects[00:26:12] Brian: I always call that like the the eighth grade book report paper problem where it has to have an intro and then, you know But that's sort of a thing where because I think you spoke about this again in your piece at the year end About how things are going multimodal and how things are that you didn't expect like, you know vision and especially audio I think So that's another thing where, at least over the last year, there's been progress made that maybe you, you didn't think was coming as quick as it came.[00:26:43] Simon: I don't know. I mean, a year ago, we had one really good vision model. We had GPT 4 vision, was, was, was very impressive. And Google Gemini had just dropped Gemini 1. 0, which had vision, but nobody had really played with it yet. Like Google hadn't. People weren't taking Gemini [00:27:00] seriously at that point. I feel like it was 1.[00:27:02] Simon: 5 Pro when it became apparent that actually they were, they, they got over their hump and they were building really good models. And yeah, and they, to be honest, the video models are mostly still using the same trick. The thing where you divide the video up into one image per second and you dump that all into the context.[00:27:16] Simon: So maybe it shouldn't have been so surprising to us that long context models plus vision meant that the video was, was starting to be solved. Of course, it didn't. Not being, you, what you really want with videos, you want to be able to do the audio and the images at the same time. And I think the models are beginning to do that now.[00:27:33] Simon: Like, originally, Gemini 1. 5 Pro originally ignored the audio. It just did the, the, like, one frame per second video trick. As far as I can tell, the most recent ones are actually doing pure multimodal. But the things that opens up are just extraordinary. Like, the the ChatGPT iPhone app feature that they shipped as one of their 12 days of, of OpenAI, I really can be having a conversation and just turn on my video camera and go, Hey, what kind of tree is [00:28:00] this?[00:28:00] Simon: And so forth. And it works. And for all I know, that's just snapping a like picture once a second and feeding it into the model. The, the, the things that you can do with that as an end user are extraordinary. Like that, that to me, I don't think most people have cottoned onto the fact that you can now stream video directly into a model because it, it's only a few weeks old.[00:28:22] Simon: Wow. That's a, that's a, that's a, that's Big boost in terms of what kinds of things you can do with this stuff. Yeah. For[00:28:30] swyx (2): people who are not that close I think Gemini Flashes free tier allows you to do something like capture a photo, one photo every second or a minute and leave it on 24, seven, and you can prompt it to do whatever.[00:28:45] swyx (2): And so you can effectively have your own camera app or monitoring app that that you just prompt and it detects where it changes. It detects for, you know, alerts or anything like that, or describes your day. You know, and, and, and the fact that this is free I think [00:29:00] it's also leads into the previous point of it being the prices haven't come down a lot.[00:29:05] Simon: And even if you're paying for this stuff, like a thing that I put in my blog entry is I ran a calculation on what it would cost to process 68, 000 photographs in my photo collection, and for each one just generate a caption, and using Gemini 1. 5 Flash 8B, it would cost me 1. 68 to process 68, 000 images, which is, I mean, that, that doesn't make sense.[00:29:28] Simon: None of that makes sense. Like it's, it's a, for one four hundredth of a cent per image to generate captions now. So you can see why feeding in a day's worth of video just isn't even very expensive to process.[00:29:40] swyx (2): Yeah, I'll tell you what is expensive. It's the other direction. So we're here, we're talking about consuming video.[00:29:46] swyx (2): And this year, we also had a lot of progress, like probably one of the most excited, excited, anticipated launches of the year was Sora. We actually got Sora. And less exciting.[00:29:55] Simon: We did, and then VO2, Google's Sora, came out like three [00:30:00] days later and upstaged it. Like, Sora was exciting until VO2 landed, which was just better.[00:30:05] swyx (2): In general, I feel the media, or the social media, has been very unfair to Sora. Because what was released to the world, generally available, was Sora Lite. It's the distilled version of Sora, right? So you're, I did not[00:30:16] Simon: realize that you're absolutely comparing[00:30:18] swyx (2): the, the most cherry picked version of VO two, the one that they published on the marketing page to the, the most embarrassing version of the soa.[00:30:25] swyx (2): So of course it's gonna look bad, so, well, I got[00:30:27] Simon: access to the VO two I'm in the VO two beta and I've been poking around with it and. Getting it to generate pelicans on bicycles and stuff. I would absolutely[00:30:34] swyx (2): believe that[00:30:35] Simon: VL2 is actually better. Is Sora, so is full fat Sora coming soon? Do you know, when, when do we get to play with that one?[00:30:42] Simon: No one's[00:30:43] swyx (2): mentioned anything. I think basically the strategy is let people play around with Sora Lite and get info there. But the, the, keep developing Sora with the Hollywood studios. That's what they actually care about. Gotcha. Like the rest of us. Don't really know what to do with the video anyway. Right.[00:30:59] Simon: I mean, [00:31:00] that's my thing is I realized that for generative images and images and video like images We've had for a few years and I don't feel like they've broken out into the talented artist community yet Like lots of people are having fun with them and doing and producing stuff. That's kind of cool to look at but what I want you know that that movie everything everywhere all at once, right?[00:31:20] Simon: One, one ton of Oscars, utterly amazing film. The VFX team for that were five people, some of whom were watching YouTube videos to figure out what to do. My big question for, for Sora and and and Midjourney and stuff, what happens when a creative team like that starts using these tools? I want the creative geniuses behind everything, everywhere all at once.[00:31:40] Simon: What are they going to be able to do with this stuff in like a few years time? Because that's really exciting to me. That's where you take artists who are at the very peak of their game. Give them these new capabilities and see, see what they can do with them.[00:31:52] swyx (2): I should, I know a little bit here. So it should mention that, that team actually used RunwayML.[00:31:57] swyx (2): So there was, there was,[00:31:57] Simon: yeah.[00:31:59] swyx (2): I don't know how [00:32:00] much I don't. So, you know, it's possible to overstate this, but there are people integrating it. Generated video within their workflow, even pre SORA. Right, because[00:32:09] Brian: it's not, it's not the thing where it's like, okay, tomorrow we'll be able to do a full two hour movie that you prompt with three sentences.[00:32:15] Brian: It is like, for the very first part of, of, you know video effects in film, it's like, if you can get that three second clip, if you can get that 20 second thing that they did in the matrix that blew everyone's minds and took a million dollars or whatever to do, like, it's the, it's the little bits and pieces that they can fill in now that it's probably already there.[00:32:34] swyx (2): Yeah, it's like, I think actually having a layered view of what assets people need and letting AI fill in the low value assets. Right, like the background video, the background music and, you know, sometimes the sound effects. That, that maybe, maybe more palatable maybe also changes the, the way that you evaluate the stuff that's coming out.[00:32:57] swyx (2): Because people tend to, in social media, try to [00:33:00] emphasize foreground stuff, main character stuff. So you really care about consistency, and you, you really are bothered when, like, for example, Sorad. Botch's image generation of a gymnast doing flips, which is horrible. It's horrible. But for background crowds, like, who cares?[00:33:18] Brian: And by the way, again, I was, I was a film major way, way back in the day, like, that's how it started. Like things like Braveheart, where they filmed 10 people on a field, and then the computer could turn it into 1000 people on a field. Like, that's always been the way it's around the margins and in the background that first comes in.[00:33:36] Brian: The[00:33:36] Simon: Lord of the Rings movies were over 20 years ago. Although they have those giant battle sequences, which were very early, like, I mean, you could almost call it a generative AI approach, right? They were using very sophisticated, like, algorithms to model out those different battles and all of that kind of stuff.[00:33:52] Simon: Yeah, I know very little. I know basically nothing about film production, so I try not to commentate on it. But I am fascinated to [00:34:00] see what happens when, when these tools start being used by the real, the people at the top of their game.[00:34:05] swyx (2): I would say like there's a cultural war that is more that being fought here than a technology war.[00:34:11] swyx (2): Most of the Hollywood people are against any form of AI anyway, so they're busy Fighting that battle instead of thinking about how to adopt it and it's, it's very fringe. I participated here in San Francisco, one generative AI video creative hackathon where the AI positive artists actually met with technologists like myself and then we collaborated together to build short films and that was really nice and I think, you know, I'll be hosting some of those in my events going forward.[00:34:38] swyx (2): One thing that I think like I want to leave it. Give people a sense of it's like this is a recap of last year But then sometimes it's useful to walk away as well with like what can we expect in the future? I don't know if you got anything. I would also call out that the Chinese models here have made a lot of progress Hyde Law and Kling and God knows who like who else in the video arena [00:35:00] Also making a lot of progress like surprising him like I think maybe actually Chinese China is surprisingly ahead with regards to Open8 at least, but also just like specific forms of video generation.[00:35:12] Simon: Wouldn't it be interesting if a film industry sprung up in a country that we don't normally think of having a really strong film industry that was using these tools? Like, that would be a fascinating sort of angle on this. Mm hmm. Mm hmm.[00:35:25] swyx (2): Agreed. I, I, I Oh, sorry. Go ahead.[00:35:29] Exploring Video Avatar Companies[00:35:29] swyx (2): Just for people's Just to put it on people's radar as well, Hey Jen, there's like there's a category of video avatar companies that don't specifically, don't specialize in general video.[00:35:41] swyx (2): They only do talking heads, let's just say. And HeyGen sings very well.[00:35:45] Brian: Swyx, you know that that's what I've been using, right? Like, have, have I, yeah, right. So, if you see some of my recent YouTube videos and things like that, where, because the beauty part of the HeyGen thing is, I, I, I don't want to use the robot voice, so [00:36:00] I record the mp3 file for my computer, And then I put that into HeyGen with the avatar that I've trained it on, and all it does is the lip sync.[00:36:09] Brian: So it looks, it's not 100 percent uncanny valley beatable, but it's good enough that if you weren't looking for it, it's just me sitting there doing one of my clips from the show. And, yeah, so, by the way, HeyGen. Shout out to them.[00:36:24] AI Influencers and Their Future[00:36:24] swyx (2): So I would, you know, in terms of like the look ahead going, like, looking, reviewing 2024, looking at trends for 2025, I would, they basically call this out.[00:36:33] swyx (2): Meta tried to introduce AI influencers and failed horribly because they were just bad at it. But at some point that there will be more and more basically AI influencers Not in a way that Simon is but in a way that they are not human.[00:36:50] Simon: Like the few of those that have done well, I always feel like they're doing well because it's a gimmick, right?[00:36:54] Simon: It's a it's it's novel and fun to like Like that, the AI Seinfeld thing [00:37:00] from last year, the Twitch stream, you know, like those, if you're the only one or one of just a few doing that, you'll get, you'll attract an audience because it's an interesting new thing. But I just, I don't know if that's going to be sustainable longer term or not.[00:37:11] Simon: Like,[00:37:12] Simplifying Content Creation with AI[00:37:12] Brian: I'm going to tell you, Because I've had discussions, I can't name the companies or whatever, but, so think about the workflow for this, like, now we all know that on TikTok and Instagram, like, holding up a phone to your face, and doing like, in my car video, or walking, a walk and talk, you know, that's, that's very common, but also, if you want to do a professional sort of talking head video, you still have to sit in front of a camera, you still have to do the lighting, you still have to do the video editing, versus, if you can just record, what I'm saying right now, the last 30 seconds, If you clip that out as an mp3 and you have a good enough avatar, then you can put that avatar in front of Times Square, on a beach, or whatever.[00:37:50] Brian: So, like, again for creators, the reason I think Simon, we're on the verge of something, it, it just, it's not going to, I think it's not, oh, we're going to have [00:38:00] AI avatars take over, it'll be one of those things where it takes another piece of the workflow out and simplifies it. I'm all[00:38:07] Simon: for that. I, I always love this stuff.[00:38:08] Simon: I like tools. Tools that help human beings do more. Do more ambitious things. I'm always in favor of, like, that, that, that's what excites me about this entire field.[00:38:17] swyx (2): Yeah. We're, we're looking into basically creating one for my podcast. We have this guy Charlie, he's Australian. He's, he's not real, but he pre, he opens every show and we are gonna have him present all the shorts.[00:38:29] Simon: Yeah, go ahead.[00:38:30] The Importance of Credibility in AI[00:38:30] Simon: The thing that I keep coming back to is this idea of credibility like in a world that is full of like AI generated everything and so forth It becomes even more important that people find the sources of information that they trust and find people and find Sources that are credible and I feel like that's the one thing that LLMs and AI can never have is credibility, right?[00:38:49] Simon: ChatGPT can never stake its reputation on telling you something useful and interesting because That means nothing, right? It's a matrix multiplication. It depends on who prompted it and so forth. So [00:39:00] I'm always, and this is when I'm blogging as well, I'm always looking for, okay, who are the reliable people who will tell me useful, interesting information who aren't just going to tell me whatever somebody's paying them to tell, tell them, who aren't going to, like, type a one sentence prompt into an LLM and spit out an essay and stick it online.[00:39:16] Simon: And that, that to me, Like, earning that credibility is really important. That's why a lot of my ethics around the way that I publish are based on the idea that I want people to trust me. I want to do things that, that gain credibility in people's eyes so they will come to me for information as a trustworthy source.[00:39:32] Simon: And it's the same for the sources that I'm, I'm consulting as well. So that's something I've, I've been thinking a lot about that sort of credibility focus on this thing for a while now.[00:39:40] swyx (2): Yeah, you can layer or structure credibility or decompose it like so one thing I would put in front of you I'm not saying that you should Agree with this or accept this at all is that you can use AI to generate different Variations and then and you pick you as the final sort of last mile person that you pick The last output and [00:40:00] you put your stamp of credibility behind that like that everything's human reviewed instead of human origin[00:40:04] Simon: Yeah, if you publish something you need to be able to put it on the ground Publishing it.[00:40:08] Simon: You need to say, I will put my name to this. I will attach my credibility to this thing. And if you're willing to do that, then, then that's great.[00:40:16] swyx (2): For creators, this is huge because there's a fundamental asymmetry between starting with a blank slate versus choosing from five different variations.[00:40:23] Brian: Right.[00:40:24] Brian: And also the key thing that you just said is like, if everything that I do, if all of the words were generated by an LLM, if the voice is generated by an LLM. If the video is also generated by the LLM, then I haven't done anything, right? But if, if one or two of those, you take a shortcut, but it's still, I'm willing to sign off on it.[00:40:47] Brian: Like, I feel like that's where I feel like people are coming around to like, this is maybe acceptable, sort of.[00:40:53] Simon: This is where I've been pushing the definition. I love the term slop. Where I've been pushing the definition of slop as AI generated [00:41:00] content that is both unrequested and unreviewed and the unreviewed thing is really important like that's the thing that elevates something from slop to not slop is if A human being has reviewed it and said, you know what, this is actually worth other people's time.[00:41:12] Simon: And again, I'm willing to attach my credibility to it and say, hey, this is worthwhile.[00:41:16] Brian: It's, it's, it's the cura curational, curatorial and editorial part of it that no matter what the tools are to do shortcuts, to do, as, as Swyx is saying choose between different edits or different cuts, but in the end, if there's a curatorial mind, Or editorial mind behind it.[00:41:32] Brian: Let me I want to wedge this in before we start to close.[00:41:36] The Future of LLM User Interfaces[00:41:36] Brian: One of the things coming back to your year end piece that has been a something that I've been banging the drum about is when you're talking about LLMs. Getting harder to use. You said most users are thrown in at the deep end.[00:41:48] Brian: The default LLM chat UI is like taking brand new computer users, dropping them into a Linux terminal and expecting them to figure it all out. I mean, it's, it's literally going back to the command line. The command line was defeated [00:42:00] by the GUI interface. And this is what I've been banging the drum about is like, this cannot be.[00:42:05] Brian: The user interface, what we have now cannot be the end result. Do you see any hints or seeds of a GUI moment for LLM interfaces?[00:42:17] Simon: I mean, it has to happen. It absolutely has to happen. The the, the, the, the usability of these things is turning into a bit of a crisis. And we are at least seeing some really interesting innovation in little directions.[00:42:28] Simon: Just like OpenAI's chat GPT canvas thing that they just launched. That is at least. Going a little bit more interesting than just chat, chats and responses. You know, you can, they're exploring that space where you're collaborating with an LLM. You're both working in the, on the same document. That makes a lot of sense to me.[00:42:44] Simon: Like that, that feels really smart. The one of the best things is still who was it who did the, the UI where you could, they had a drawing UI where you draw an interface and click a button. TL draw would then make it real thing. That was spectacular, [00:43:00] absolutely spectacular, like, alternative vision of how you'd interact with these models.[00:43:05] Simon: Because yeah, the and that's, you know, so I feel like there is so much scope for innovation there and it is beginning to happen. Like, like, I, I feel like most people do understand that we need to do better in terms of interfaces that both help explain what's going on and give people better tools for working with models.[00:43:23] Simon: I was going to say, I want to[00:43:25] Brian: dig a little deeper into this because think of the conceptual idea behind the GUI, which is instead of typing into a command line open word. exe, it's, you, you click an icon, right? So that's abstracting away sort of the, again, the programming stuff that like, you know, it's, it's a, a, a child can tap on an iPad and, and make a program open, right?[00:43:47] Brian: The problem it seems to me right now with how we're interacting with LLMs is it's sort of like you know a dumb robot where it's like you poke it and it goes over here, but no, I want it, I want to go over here so you poke it this way and you can't get it exactly [00:44:00] right, like, what can we abstract away from the From the current, what's going on that, that makes it more fine tuned and easier to get more precise.[00:44:12] Brian: You see what I'm saying?[00:44:13] Simon: Yes. And the this is the other trend that I've been following from the last year, which I think is super interesting. It's the, the prompt driven UI development thing. Basically, this is the pattern where Claude Artifacts was the first thing to do this really well. You type in a prompt and it goes, Oh, I should answer that by writing a custom HTML and JavaScript application for you that does a certain thing.[00:44:35] Simon: And when you think about that take and since then it turns out This is easy, right? Every decent LLM can produce HTML and JavaScript that does something useful. So we've actually got this alternative way of interacting where they can respond to your prompt with an interactive custom interface that you can work with.[00:44:54] Simon: People haven't quite wired those back up again. Like, ideally, I'd want the LLM ask me a [00:45:00] question where it builds me a custom little UI, For that question, and then it gets to see how I interacted with that. I don't know why, but that's like just such a small step from where we are right now. But that feels like such an obvious next step.[00:45:12] Simon: Like an LLM, why should it, why should you just be communicating with, with text when it can build interfaces on the fly that let you select a point on a map or or move like sliders up and down. It's gonna create knobs and dials. I keep saying knobs and dials. right. We can do that. And the LLMs can build, and Claude artifacts will build you a knobs and dials interface.[00:45:34] Simon: But at the moment they haven't closed the loop. When you twiddle those knobs, Claude doesn't see what you were doing. They're going to close that loop. I'm, I'm shocked that they haven't done it yet. So yeah, I think there's so much scope for innovation and there's so much scope for doing interesting stuff with that model where the LLM, anything you can represent in SVG, which is almost everything, can now be part of that ongoing conversation.[00:45:59] swyx (2): Yeah, [00:46:00] I would say the best executed version of this I've seen so far is Bolt where you can literally type in, make a Spotify clone, make an Airbnb clone, and it actually just does that for you zero shot with a nice design.[00:46:14] Simon: There's a benchmark for that now. The LMRena people now have a benchmark that is zero shot app, app generation, because all of the models can do it.[00:46:22] Simon: Like it's, it's, I've started figuring out. I'm building my own version of this for my own project, because I think within six months. I think it'll just be an expected feature. Like if you have a web application, why don't you have a thing where, oh, look, the, you can add a custom, like, so for my dataset data exploration project, I want you to be able to do things like conjure up a dashboard, just via a prompt.[00:46:43] Simon: You say, oh, I need a pie chart and a bar chart and put them next to each other, and then have a form where submitting the form inserts a row into my database table. And this is all suddenly feasible. It's, it's, it's not even particularly difficult to do, which is great. Utterly bizarre that these things are now easy.[00:47:00][00:47:00] swyx (2): I think for a general audience, that is what I would highlight, that software creation is becoming easier and easier. Gemini is now available in Gmail and Google Sheets. I don't write my own Google Sheets formulas anymore, I just tell Gemini to do it. And so I think those are, I almost wanted to basically somewhat disagree with, with your assertion that LMS got harder to use.[00:47:22] swyx (2): Like, yes, we, we expose more capabilities, but they're, they're in minor forms, like using canvas, like web search in, in in chat GPT and like Gemini being in, in Excel sheets or in Google sheets, like, yeah, we're getting, no,[00:47:37] Simon: no, no, no. Those are the things that make it harder, because the problem is that for each of those features, they're amazing.[00:47:43] Simon: If you understand the edges of the feature, if you're like, okay, so in Google, Gemini, Excel formulas, I can get it to do a certain amount of things, but I can't get it to go and read a web. You probably can't get it to read a webpage, right? But you know, there are, there are things that it can do and things that it can't do, which are completely undocumented.[00:47:58] Simon: If you ask it what it [00:48:00] can and can't do, they're terrible at answering questions about that. So like my favorite example is Claude artifacts. You can't build a Claude artifact that can hit an API somewhere else. Because the cause headers on that iframe prevents accessing anything outside of CDNJS. So, good luck learning cause headers as an end user in order to understand why Like, I've seen people saying, oh, this is rubbish.[00:48:26] Simon: I tried building an artifact that would run a prompt and it couldn't because Claude didn't expose an API with cause headers that all of this stuff is so weird and complicated. And yeah, like that, that, the more that with the more tools we add, the more expertise you need to really, To understand the full scope of what you can do.[00:48:44] Simon: And so it's, it's, I wouldn't say it's, it's, it's, it's like, the question really comes down to what does it take to understand the full extent of what's possible? And honestly, that, that's just getting more and more involved over time.[00:48:58] Local LLMs: A Growing Interest[00:48:58] swyx (2): I have one more topic that I, I [00:49:00] think you, you're kind of a champion of and we've touched on it a little bit, which is local LLMs.[00:49:05] swyx (2): And running AI applications on your desktop, I feel like you are an early adopter of many, many things.[00:49:12] Simon: I had an interesting experience with that over the past year. Six months ago, I almost completely lost interest. And the reason is that six months ago, the best local models you could run, There was no point in using them at all, because the best hosted models were so much better.[00:49:26] Simon: Like, there was no point at which I'd choose to run a model on my laptop if I had API access to Cloud 3. 5 SONNET. They just, they weren't even comparable. And that changed, basically, in the past three months, as the local models had this step changing capability, where now I can run some of these local models, and they're not as good as Cloud 3.[00:49:45] Simon: 5 SONNET, but they're not so far away that It's not worth me even using them. The other, the, the, the, the continuing problem is I've only got 64 gigabytes of RAM, and if you run, like, LLAMA370B, it's not going to work. Most of my RAM is gone. So now I have to shut down my Firefox tabs [00:50:00] and, and my Chrome and my VS Code windows in order to run it.[00:50:03] Simon: But it's got me interested again. Like, like the, the efficiency improvements are such that now, if you were to like stick me on a desert island with my laptop, I'd be very productive using those local models. And that's, that's pretty exciting. And if those trends continue, and also, like, I think my next laptop, if when I buy one is going to have twice the amount of RAM, At which point, maybe I can run the, almost the top tier, like open weights models and still be able to use it as a computer as well.[00:50:32] Simon: NVIDIA just announced their 3, 000 128 gigabyte monstrosity. That's pretty good price. You know, that's that's, if you're going to buy it,[00:50:42] swyx (2): custom OS and all.[00:50:46] Simon: If I get a job, if I, if, if, if I have enough of an income that I can justify blowing $3,000 on it, then yes.[00:50:52] swyx (2): Okay, let's do a GoFundMe to get Simon one it.[00:50:54] swyx (2): Come on. You know, you can get a job anytime you want. Is this, this is just purely discretionary .[00:50:59] Simon: I want, [00:51:00] I want a job that pays me to do exactly what I'm doing already and doesn't tell me what else to do. That's, thats the challenge.[00:51:06] swyx (2): I think Ethan Molik does pretty well. Whatever, whatever it is he's doing.[00:51:11] swyx (2): But yeah, basically I was trying to bring in also, you know, not just local models, but Apple intelligence is on every Mac machine. You're, you're, you seem skeptical. It's rubbish.[00:51:21] Simon: Apple intelligence is so bad. It's like, it does one thing well.[00:51:25] swyx (2): Oh yeah, what's that? It summarizes notifications. And sometimes it's humorous.[00:51:29] Brian: Are you sure it does that well? And also, by the way, the other, again, from a sort of a normie point of view. There's no indication from Apple of when to use it. Like, everybody upgrades their thing and it's like, okay, now you have Apple Intelligence, and you never know when to use it ever again.[00:51:47] swyx (2): Oh, yeah, you consult the Apple docs, which is MKBHD.[00:51:49] swyx (2): The[00:51:51] Simon: one thing, the one thing I'll say about Apple Intelligence is, One of the reasons it's so disappointing is that the models are just weak, but now, like, Llama 3b [00:52:00] is Such a good model in a 2 gigabyte file I think give Apple six months and hopefully they'll catch up to the state of the art on the small models And then maybe it'll start being a lot more interesting.[00:52:10] swyx (2): Yeah. Anyway, I like This was year one And and you know just like our first year of iPhone maybe maybe not that much of a hit and then year three They had the App Store so Hey I would say give it some time, and you know, I think Chrome also shipping Gemini Nano I think this year in Chrome, which means that every app, every web app will have for free access to a local model that just ships in the browser, which is kind of interesting.[00:52:38] swyx (2): And then I, I think I also wanted to just open the floor for any, like, you know, any of us what are the apps that, you know, AI applications that we've adopted that have, that we really recommend because these are all, you know, apps that are running on our browser that like, or apps that are running locally that we should be, that, that other people should be trying.[00:52:55] swyx (2): Right? Like, I, I feel like that's, that's one always one thing that is helpful at the start of the [00:53:00] year.[00:53:00] Simon: Okay. So for running local models. My top picks, firstly, on the iPhone, there's this thing called MLC Chat, which works, and it's easy to install, and it runs Llama 3B, and it's so much fun. Like, it's not necessarily a capable enough novel that I use it for real things, but my party trick right now is I get my phone to write a Netflix Christmas movie plot outline where, like, a bunch of Jeweller falls in love with the King of Sweden or whatever.[00:53:25] Simon: And it does a good job and it comes up with pun names for the movies. And that's, that's deeply entertaining. On my laptop, most recently, I've been getting heavy into, into Olama because the Olama team are very, very good at finding the good models and patching them up and making them work well. It gives you an API.[00:53:42] Simon: My little LLM command line tool that has a plugin that talks to Olama, which works really well. So that's my, my Olama is. I think the easiest on ramp to to running models locally, if you want a nice user interface, LMStudio is, I think, the best user interface [00:54:00] thing at that. It's not open source. It's good.[00:54:02] Simon: It's worth playing with. The other one that I've been trying with recently, there's a thing called, what's it called? Open web UI or something. Yeah. The UI is fantastic. It, if you've got Olama running and you fire this thing up, it spots Olama and it gives you an interface onto your Olama models. And t

Several property managers find themselves feeling alone in their difficult market. It might feel impossible to grow after being stagnant for so long. In this episode, property management growth experts Jason and Sarah Hull sit down with DoorGrow client Brian Bean to talk about how he grew his property management business despite the challenges he faced. You'll Learn [01:55] Getting started in property management [06:20] Making business partnerships work [09:47] Shifting from real estate to property management [18:21] What's next for your property management business? Tweetables “It's really difficult for partnerships to be successful because for most people, the ego is getting in the way.” “What you focus on is what you get.” “Until we learn how to get and find people that we feel safe with, I don't think we're supposed to trust.” “When you get really great people, it's not hard to trust them.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Brian: After 10 years of just being flat from 30 to 35 units. And then now literally doubled it last week. And that's been from following your instruction, your philosophies and you know, focusing on building this business.  [00:00:15] Jason: Welcome DoorGrowers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrower. DoorGrower, property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not, because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. [00:00:58] We want to transform the industry, eliminate the BS, Build awareness, change perception, expand the market and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, co owner and COO of DoorGrow. Now let's get into the show.  [00:01:18] So our guest today we're hanging out with Brian Bean, who is one of our clients and Brian your company is Dream Big Property Management.  [00:01:28] Brian: That's right. We're in Merced, California.  [00:01:30] Jason: All right. In Merced, California. So Brian welcome to the show. Oh, Riverside. You said Riverside. [00:01:37] Okay. Got it. I know this area. So yeah, I grew up in Rancho Cucamonga. So just a little bit near there. So Brian tell us a little bit about your journey and how you got into property management and then eventually how you stumbled across DoorGrow, I guess.  [00:01:55] Brian: Right, so, I was a newspaper editor and reporter and I got a job, grew up in the Pacific Northwest, got a journalism degree, got a job in Palm Springs on the Daily Newspaper, and moved to California in the 80s. [00:02:11] And so I did that for 13 or 14 years toward the end I, you know, coming from an entrepreneurial background, my uncle gave me my first, second, third job when I was a kid he owned a, like, old style service station. So I grew up in that small business atmosphere. And when I went to work in newspapers, you know, I had these lofty aspirations, these utopian ideas, you know, you're getting your twenties about doing something to change the world or, you know, to have an impact. And I found out after about 10 years, that was just, it's just another corporate job. And so I was looking around for something else and I looked at a lot of different businesses. [00:02:55] And I ended up coming upon real estate and I was able to, while I was a newspaper editor, I was able to buy five, two five unit apartment buildings in Palm Spring. Nice. And that was my introduction to property management. I was pretty much doing that during the day. We were putting out newspapers in a, from like three in the afternoon to midnight, you know, the press would roll at midnight and and I did it all, you know, I, from everything from dealing with the tenants face to, you know, patch and drywall to whatever collecting rents, chasing rents, made all the mistakes. [00:03:33] And I was, it was self education trial by fire. And then a few years later, I went into real estate full time and sales. I had a partner in the apartments who was actually the listing agent on those apartments at the time, but he invited me into real estate full time in 2001. [00:03:49] And then we were off on a, and it was a run. And so I, I did property management for a while from on our own properties. And then I've just morphed into sales and we were pretty successful and very busy and then the market crashed, and you know, we just kind of moved with the market.  [00:04:08] Jason: And when was that? [00:04:09] Like 2006,  [00:04:11] Brian: maybe, or?  [00:04:11] Yeah. So 2006 at least in our area, it was August, 2006 when we peaked sales wise. And in 2007, we had, I don't know, a dozen listings and nobody, you couldn't buy a showing, you know? And so 2007, it was the real estate market was, you know, dead man walking. It was, there was nobody really knew what was happening? Well, the masses, right? Some people knew, right? There was stuff going on obviously on wall street, but, the masses didn't know what was happening. Prices stayed up for awhile and they were, it was just like that, that hovering just before the, you know, you throw a ball in the air and it just kind of floats at the apex for a moment right before 2008 and then wow. [00:04:54] Right. Who knew? Yeah. So, You we just kind of morphed with it. I've worked, I did a lot of, I helped a lot of people with short sales, we worked in foreclosures and. And then I met my current business partner in sales working in an REO house as a buyer's agent. And we started our own company, Dream Big Real Estate, and that was 2008, 2009. [00:05:15] So from there, a couple of years later I just happened to say to my partner, you know, even though we were very busy, I said, "I really think we should launch a property management division" because at that time, my mentality was, it's a place where we can create sales listings, right? [00:05:35] And so we did that for a few years. And, you know, the interesting thing about it was that we didn't do any marketing. It was just really word of mouth, but. The day that I mentioned that to my partner, Tim, he just said, "yeah, cool, whatever." Right. he knew I was going to probably be working on it because I had the background in it, but I didn't tell anybody. [00:05:55] And the next day the phone rang and our first property management client just was calling out of the blue. Still have them, still work with them. [00:06:03] And then a week later, somebody else called. And it was the same thing, and that was our second client. Still working with them as well. And the, you know, I'm not into rubbing crystals or sleeping under pyramids, but you know, you ask the universe and the universe will provide. [00:06:19] Jason: One of the things that you mentioned, Brian, that I think's really interest is, it sounds like part of your journey, like there's this importance you've probably realized in partnerships. [00:06:28] because you've mentioned multiple times, you know, you partner with the listing agent and then eventually you partner with Tim. And so how is finding the right partners been instrumental in your growth and your progress? [00:06:41] Brian: Well, I will say this is that later on more recently, this year, they have broken out the property management business that was running as part of our real estate sales business. I've broken that out separately, and I'm now solo doing that. Right. Have had partners in the past, and I have found working with partners to be that there's advantages and disadvantages. Totally. It's hard to find, it's really difficult for partnerships to be successful because most people, the ego is getting in the way or, you know, there becomes a battle about, you know, who's doing what, who deserves this, who deserves that. [00:07:24] Yeah. Personality wise, I'm kind of roll with it person, you know? I'm more of a solution oriented person. Just what we need to get from point A to point B, what's the best way to do that? What for the good of the company, not necessarily for what's best for me personally. Yeah. So I've gone through a couple of partnerships with different people, I have been able to make that work from my point of view, because. [00:07:49] Because of my personality type, I think, but it is not for the the weak hearted, you know, I mean, it is some days are a lot harder than others.  [00:07:58] Jason: I've seen some of the most successful I've seen have really healthy partnerships in some of the worst situations I've seen where they couldn't grow because one was like an anchor, not willing to move and they had just as much decision making power and until they were able to get that partner out of the business, they weren't able to progress. So it can be a boost in the positive, but it's really difficult to find a really good match. [00:08:24] Brian: Yeah, and that's the thing is like, I'm more of a behind the scenes person, just in general, I'm more like I can implement. I generally will have the ideas as well, but I'm the one that I'm kind of a control freak, quite frankly, and so one of my character flaws is right now that I'm trying to work on is feeling like I need to touch everything, you know, because that's that is a throttle in the business. [00:08:48] Jason: Well, I think we all start there. Every entrepreneur starts there, so everybody listening should be able to empathize with that because you know we want to do a good job because we care. We want to look good. We care about how we look right like whatever it is. The challenge with being a control freak is trust and until we learn how to get and find people that we feel safe with, I don't think we're supposed to trust, you know. We're not supposed to just trust blindly. We need to find people that deserve to be trusted and know how to build that team. And that's probably kind of the next level, right? Is for you maybe is to build that team of people that you trust because when you get really great people, it's not hard to trust them. [00:09:30] Yeah. But they need to match you. Like they need to be a good coach. And then it's a lot easier to trust them. And so in this journey, you split out your business and then you have a property management business. It's all yours. You're still doing real estate stuff also? You still connected to that? [00:09:47] Brian: I am, but my mentality has shifted. It's probably been more than two years since the first time I talked to someone from your company and yet we didn't start with your company until, when was it, March this year? It was a two year lag of wrapping my mind around the philosophy of, Just making the shift, right? [00:10:06] Because property management always for us was a, just a holding place for future sales listings. And now, it's the business. Property management's the business and sales is ancillary benefit.  [00:10:21] Jason: So what prompted that shift? How did your brain work that out eventually?  [00:10:25] Brian: I think it's a combination of a variety of things. Having now 20 plus years in the business, I've been through an up and a down and an up and a flat, right? Who knows what the next one looks like. Is it eighties, nineties, or is it two thousands downturn? Yeah. And where I am in life, right. And I mean, do I want to work forever? Just slinging, right? Do I want to be out there, you know, showing, opening doors at, you know, 68 years old? [00:10:57] Jason: And chasing deals? Yeah.  [00:10:59] Brian: So mailbox money, right. Building a business that's sellable. Right now, or up until this point, I should say, it has been 100 percent every dollar that comes into our house is product of my labor, and that is a train coming down the track. [00:11:19] Right. So I needed to make some changes now that would have dramatic impacts on my future. If I wanted to change what I was doing, you know. [00:11:27] Jason: Yeah. Got it. Yeah. That switch from kind of recognizing you're kind of trading time for dollars to realizing, "Hey maybe I want to build something." [00:11:36] I mean, it's really tempting because you close one real estate deal, that can be a lot of money, but eventually I think there's a lot of real estate agents that wake up to this, that they're like, "Hey, if real estate kind of takes a nosedive or do I want to do this forever?" Maybe not. [00:11:52] Property management might be a really great business model.  [00:11:55] Brian: Like I said, we did our sales under under Better Homes and Gardens now, and I don't know, did I say that? Maybe in my own head. So the property management is under my own brokerage. The sales that we do, we work under Better Homes and Gardens. [00:12:10] I, you know, Tim and I as sales agents here until this year, we've been the number one agent, like since we came here. So seven, eight years, however long it's been. I do see the changes. I have seen the changes come in and perhaps it's a little bit of you just mental scar tissue from the crash of, you know, '8, '9, '10, ' 11. Yeah. It's just, you know, because the cracks have been forming in the foundation of this real estate sales market for a few years. Right. And it's been propped up artificially by government policies. Yeah. For three, four years. Right. And so, I've been waiting for a shoe to drop quite frankly. [00:12:51] And so two years ago a guy used to work for you, Jon. I called Jon back in like February this year. "Hey, Jon, you still working over at DoorGrow?" Jon was actually the one who said to me two years ago, two and a half years ago now, " if you do this, our expectation is that you're going to change your philosophy. You're going to be a property manager who doesn't do sales." What? That took me a while to embrace.  [00:13:17] Jason: Yeah. Yeah. Jon's a good friend of mine. We just went out to lunch recently. He's really sharp, dude. So, you know, I'm really curious, Brian, this journey from being a reporter for a while to real estate, to now shifting your identity into being a property manager, and that's the focus. How do you feel the reporter in you helps the property manager?  [00:13:44] Brian: Yeah, perfect proving ground. It's who I am is based on education, information gathering, being an advocate for consumers, right? [00:13:56] That's what I was trained to be as a reporter and editor, as a journalist, and that just morphs perfectly into what I do now, which is to look after my client's financial well being, right? And it doesn't hurt that I tend to over explain things, right? Because that's what I do, right? Is my job is to go out and gather information and then provide it in an objective way so that people can then make the best decisions for them and their family, right? So that's being a reporter, right? It is to shine a light on the facts so that people can decide. I mean, sometimes you got to take them by the hand and lead them down the path, right, educating them along the way. Yeah, for sure.  [00:14:37] Sarah: So what was the thing that made you go, "all right, I'm finally going to do this. Like I'm going to jump on board, get involved with DoorGrow and start really focusing on this property management thing? [00:14:49] Brian: Yeah. So earlier this year I had been kicking around, you know, you're looking at numbers, right? Kicking around the idea of "how much more time do I want to do this?" [00:14:59] And there were some personal things that got into it too, because you start looking at relationships and your family and looking at the things that are most important in your life. And priority wise, where have they been on your list? And so I decided I wanted to make some changes and then I lost some friends and family members just in the past year. [00:15:25] And so, one of the things that I picked up in the newspaper was Spending too much time in the office and and spending the less time seeing family and, you know, coming out of COVID and just, it's just like a combination of a lot of things all crashing together at one time.  [00:15:41] Sarah: We are under attack in our house right now. [00:15:43] We have groceries being delivered.  [00:15:45] Jason: Dogs are going nuts. [00:15:49] Our professional podcast, everybody, so.  [00:15:53] Brian: Anyway, so that was you know, some personal stuff came up and I decided to reevaluate. Now, in the past 10 plus years, I've been doing property management. [00:16:04] providing a supply of say two to six listings a year and making that shift. I don't know, it was a conversation with my wife and you know, running numbers and trying to figure out like, is it even possible? And there's a transition period because what you focus on is what you get. Right. So if I start focusing a hundred percent on property management, and how is that going to affect my income for people? You know, because what I do today in sales, that's not income for 90 days. Right. So at some point you have to be able to make that transition. And so, you know, it was a bit of a leap of faith. [00:16:42] And so, like I said, when I called Jon to ask if he was still working with you guys, then he said, no. He called me back though, but he said no, but he then referred me over to somebody. So, but making that switch, it wasn't an overnight decision by any means. [00:16:58] I agonized over it. It was sleepless nights, some nights. But I knew that I had to do something.  [00:17:04] Jason: So, well, you took a big risk then this leap of faith and then jumped on board with DoorGrow, decided to focus on property management. You feel like you made a good choice? [00:17:14] Brian: Yes. You don't know what you don't know. And so, I've been on a journey of learning what other people are doing, best practices, ancillary services to go along, you know, support type pieces of everything from other streams of income that are related that are, you know, not just management fees and placement fees, right? [00:17:37] I mean, there's a variety, but it's crazy what I've implemented just in the past six months, it's just been an insane pace and now I'm like eight days away from moving to a new, property management portal, and that will be the cherry on top, really. Most of the footwork of putting the foundation together will be mostly done, and then it's digging into processes. [00:18:02] Jason: Awesome. Yeah. So. Yeah. So you've made a lot of changes to your business and you said you've been learning it at an insane pace. So hopefully we're not making you bored with all this stuff. We've got plenty of stuff, right? It can be a bit overwhelming. We give the feedback on. So Brian, well, what's what's next for you in the future? [00:18:25] Brian: Right now I'm just trying to continue to learn from you and I'm just focusing on growing the number of doors that we manage and creating a business that will have sustainable and continuous growth and then part of the process has been, yes, putting the tools in place and doing the things that you know, I've been advised to do to create this and grow this business. [00:18:53] But when you start, you don't necessarily believe it, right? It truly is that leap of faith. And over time, my belief is starting to catch up with my activity. And so, you know, to go like when last week we literally hit the doubling point of when we started with you and after 10 years of just being flat from 30 to 35 units. And then now literally doubled it last week. And that's been from following your instruction, your philosophies and you know, focusing on building this business.  [00:19:30] Jason: Yeah. Well, I'm glad that the next 30 doors didn't take 10 years. That's awesome. Doubling in four months and I think things will speed up from here. So, well, I think that's a good place to end on. I think that's really awesome. So we appreciate you as a client. It's been great seeing your progress. You know, I think there's a lot of property managers out there that are like you, they come from the real estate industry. They want to get out of the hunt and the chase. Maybe they've been doing property management for even a decade, but you know, they haven't really made progress in their growth significantly in the last year or two or three or 10, you know, and and now maybe it's time, maybe it's time. [00:20:10] So maybe some parting words, Brian, what would you say to those that like they've been watching DoorGrow for a while? What would you say to them?  [00:20:17] Brian: Don't wait. You know, where would I be if I'd started two years ago? . I think about that occasionally, and then I have to stop myself because that just takes me off track. [00:20:26] And you get into that regret, you know, loop in your head. Like, no, I don't have time for that. I am where I'm now. And everybody is where they are now, right? And so you can either take action today or not, your results will reflect that. Yeah.  [00:20:42] Sarah: And you're exactly where you're supposed to be in that moment. I can do that to myself too. I can go back and go, "Oh, what if I did this sooner? It could be so much farther." Right. But I think that things just tend to work out the way that they're supposed to work out and things kind of line up. And I think you were prepped, right? [00:20:59] You knew about DoorGrow. You were kind of checking it out. You weren't sure if you were going to make that jump and you did when you were ready and it paid off.  [00:21:06] Jason: Yeah. So, there's a cool book called the gap and the gain. And the idea is that it's so easy for us as entrepreneurs to focus on the gap between where we should be by now. Where our dream or what we could have done. And that's not really an effective comparison psychologically. Like that, like doesn't make us feel super great about ourselves. But what is effective though, is to look at the gain. How far have we come? And I mean, four months. You've come a long way. [00:21:34] And so the next year, I think it's going to be really awesome for you. So I'm excited to see what you do, Brian. So thank you. All right. Thanks for coming on the DoorGrow show.  [00:21:44] Brian: Glad to be here. Thanks.  [00:21:46] Jason: Thanks again. All right. If you are a property management entrepreneur, you're wanting to grow your business. [00:21:51] Maybe you've been sitting stagnant for a while. You haven't had significant progress in the last year, maybe the year before that you might even be a really large company and you're not making progress. I've talked to several with thousands of doors in just the last week. We just got one of them on as a client and they've been struggling to figure out how to grow and they cannot even spend any more money on ads to get any more clients.  [00:22:13] It's not working. If you want to figure out how to start moving your business forward significantly, we can easily help you add 100, 200, maybe even 300 doors in a year. And it's without wasting money or spending money on advertising. And that might sound ridiculous, but Brian's going to do it. [00:22:29] Like we're seeing people do it all the time. So reach out, you can check us out at doorgrow. com. We would love to help you grow your business. Talk to you soon. Bye everyone. [00:22:39] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:23:06] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Brian Feretic is the Founder of Blossm, a community marketplace to buy, sell, and trade plants. Victoria talks to Brian about how coming up with the concept happened, getting started in a very scrappy way and then filling in gaps, and opening up the app to have full marketplace functionality with buying, selling, and trading capabilities. Blossm (https://blossm.garden/) Follow Blossm on LinkedIn (https://www.linkedin.com/company/blossm-plant-marketplace/), Twitter (https://twitter.com/blossmllc), Instagram (https://www.instagram.com/blossmplantswap/), Facebook (https://www.facebook.com/blossmplantswap) or TikTok (https://www.tiktok.com/@blossmplantswap). Follow Brian Feretic on LinkedIn (https://www.linkedin.com/in/brian-feretic-3b2b337a/). Follow thoughtbot on Twitter (https://twitter.com/thoughtbot) or LinkedIn (https://www.linkedin.com/company/150727/). Become a Sponsor (https://thoughtbot.com/sponsorship) of Giant Robots! Transcript: VICTORIA: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Victoria Guido or Tori. And with me today is Brian Feretic, Founder of Blossm, a community marketplace to buy, sell, and trade plants. Brian, thank you for joining us. BRIAN: Hey, it's great to be here, Tori. VICTORIA: Great. I'm excited to hear more about Blossm. Why don't you just tell me a little bit more about the concept? BRIAN: The concept actually happened at the end of 2019, and I'd already been a plant enthusiast for a couple of years. I was actually just going on my way to surf in my town of Ocean Beach, San Diego, and I stopped by this garage sale. And when I came back to pay my neighbor, I brought this rubber plant that are propagated just as a neighborly gift. She flipped out. She was ecstatic. She's like, "Oh my God, I'm such a huge plant person. Thank you so much. Why don't you come into my backyard, and I'll give you a plant tour, and you can pick something out." And what was cool about this was it wasn't just like a simple exchange. It was like this hour-long interaction with someone that lived four blocks from me that happened to be this big plant nerd like me. And I got her whole story. She went through all these different species I didn't know about. And then, she helped me pick one out, which I still have to this day. It's this crassula succulent. When I was walking home with my new plant, I was like, oh wow, I got to go download the app for this. I would have never known this person that lives four houses away was a big plant person like me. And when I got home, I searched the App Store. I did a Google search. I just couldn't find what I was looking for, which was basically this plant-swapping plant-connecting platform where I could find fellow plant nerds in my neighborhood. And so that kind of set me off on this path. I did some more research and decided...I was like, you know what? I'm going to commit to this and make this happen for myself and for my community. VICTORIA: Well, what do you think makes someone a plant person [laughs] or like a...how did you describe yourself? A plant nerd? What sets that user apart? BRIAN: We'll say it's like on a spectrum where people can shift along the spectrum. But I'd say when people start treating their plants more than objects and more what they are. They are these living things. They're beautiful. They bring people joy. I find it therapeutic to take care of them. And then the beautiful thing about it is that these plants grow, and you can propagate them and share them with your friends. And I think that is a critical aspect of this whole plant person thing. VICTORIA: So the plants have become a little more like pets, and you can grow them in a way that creates a community around your friendship and your local area. BRIAN: Yeah, exactly. That was actually the early signal about this whole plant world is that I saw people creating plant-dedicated Instagram accounts as if it was your dog or cat. And that was something that I realized this is a different type of person. This is a very passionate person willing to, like, they're so proud of their plant babies, we call them. [laughter] VICTORIA: Right. And it's funny, you say, plant babies. When I think of people I know who I would consider plant people, they do talk to their plants like their babies. They're like, "Oh, it's so cute." [laughs] Or they're like, "Oh, he's not feeling so well." So I think that's great. And so you started to do some research into this community, into this group. What surprised you about your early findings? BRIAN: This was actually something that I didn't realize until I dug deeper was that I thought that it was only going to be a local thing. People wanted to experience what I did with Sondra, who's the neighbor I swapped with, this in-person connection, swapping, checking each other's gardens out and houseplants. But I learned very quickly that people ship plants to each other not only within your own state but across the country, and this is global. And I was just like, how do people ship plants? Turns out I do it all the time, almost weekly now, for years. That aspect was critical to realize, all right; this plant community doesn't necessarily have to be bound by physical in-person distance. It can connect online, and people share all over via shipping. VICTORIA: That's really cool. So you decided that there's a whole international community. So is that when you decided to really start building something like an application to help people? BRIAN: I remember just throwing this idea out to a lot of different friends, like, various backgrounds. And I was like, "Hey, what do you think of this idea about connecting people through this shared love?" And there is not one person who thought it was a terrible idea. And then I remember talking about it with a roommate at the time, and basically the same thing. I was like, "Hey, man, imagine people connecting through the shared passion. Who knows? Maybe even love can blossom." And he was like, "Dude, that's what you should call it." I was like, oh, that's a great name. It's about three and a half years now, and it's stuck ever since. VICTORIA: I love that, [laughter] about sharing love, and how the name came about, and just starting with your friends and people you knew and bouncing ideas off of them. But your background is not specifically in technology. So what about your background applied? And what did you have to learn new to take along this journey? BRIAN: So my whole career, I've been involved within the science sector. I actually moved to San Diego to pursue graduate school in neuroscience. I was very curious about kind of full neural networks and how those contribute to behavior. Actually, the Ph.D. program I wanted to get into at UCSD, there's a specific lab doing this really cool research with this new innovative imaging technique. And I applied twice, and I didn't get in. And so I went into biotech. But I would say probably two things helped me. I realize now going through this entrepreneur path, things that helped train me for this, was definitely a graduate school where you're pretty much broke the whole time. My lab didn't have too much funding, so you had to be really resourceful and creative to figure stuff out with minimal resources. And that's perfectly summed up the last couple of years, just like figuring stuff out. We have no money. How do we get awareness of our product when we can't spend, you know, we don't have ad spend or marketing budget? And it just kind of requires you to get creative and think outside the box and just really think, all right, what do I do here? And I came up with some hacky-type strategies that have been very effective. [laughs] VICTORIA: Well, very cool. It sounds like you found your team now to start working with you on this in a very scrappy way. So how did you fill in those gaps, maybe in your knowledge or your background on how to get this done by the people that you grew around you? BRIAN: For me, it wasn't too difficult. Well, one, my background. I was very naive with tech at the time and just programming in general. So my first task, I laid out three options. It was like, one, I can learn how to code. I dabbled in it for a week, and I was like, man, there's no way. [laughter] Two, I was like, I can outsource it, maybe somewhat cheaply, but I don't want to spend all my savings on it. But more, I knew that, you know, say you come out of MVP product, the product always is growing, adapting, evolving, or you encounter bugs. And I could just see how full of friction the process would be if I had to, like, all right, we have found a bug, send the contract out. They have to accept the contract. And I just knew progress would be too slow to operate in that fashion. And the third option was, like, find a technical co-founder and pursue this dream with, you know, a buddy. I was like, all right, who do I know that is in the computer stuff? And that was my thought. And my first guy I pitched it to was a friend I went to college with at Bucknell University. And he was like, I think, "This is a good idea." But he's like, "I'm going to retire probably in five years, and this is going to be a very lengthy thing." He's like, "I'm not interested." The second guy was extremely down for it, but it turns out he didn't know how to do any mobile app development. He uses a consultant. [laughs] And so the third and who I ended up working with was my surfing and climbing buddy Nick Mitchell. I just knew he did computer-type stuff. I pitched him the idea, and he was like, "What's up with this plant thing?" VICTORIA: [laughs] BRIAN: And I was like, "Oh, dude, this is a rapidly growing market. I know the ins and outs really well. I know this audience. I'm one of them." He wasn't sold until he heard an NPR piece talking about the houseplant boom. And then his father sent him an article from the New York Times saying how millennials are embracing houseplants and driving this new houseplant market. And so I think this was maybe end of December, now in 2019. And he hit me up, and of course, he's like, "Oh, dude, I want in. Let's do it." But I also wanted to make sure I knew he could actually do what was the task at hand. [laughter] So I had my other first friend vet his GitHub and stuff just to make sure. [laughs] VICTORIA: Oh, cool. [laughs] BRIAN: And he was like, "Yeah, you know, he looks good. Worth a shot." And it turns out Nick is excellent. He did all the front end, back end. He built this whole app basically from scratch. It's pretty amazing what he's capable of. So I got it right on the third try. [laughs] VICTORIA: That's funny. And I'm not surprised it came from networking in the climbing community, either. BRIAN: Right. There's a lot of smart...definitely a lot of smart people in the climbing community. And those are like my closest friends now. So it was kind of cool to find someone in that place. VICTORIA: And I've been climbing with friends before, and you're talking about work or whatever. And they're like, "Oh, yeah, I'm also like an Azure architect," [laughs] like some specific skill that's related to what you need. And I think it's a similar cultural mindset of people you want to be working with too. Maybe that's just me. So, okay, so you found your partner. You had someone who had all the skills that you needed to make this happen. How long did it take until you really had something you were proud of? BRIAN: So, for me, I was laid off in August of 2019. I was working at Celgene, and they got acquired by Bristol Myers Squibb for like 72 billion, so massive merger. And I was kind of getting over the field. And so I was already basically unemployed. Nick, when we started actually working together in...we'll just call it January 2020. We started working on it casually, and then the pandemic happened. And then he got laid off. And he did about a three-month stint before he got another job at ServiceNow. But within those three months, he really cranked out like a full MVP. And then I had about probably at least 60 or 70 people I knew beta test the product for feedback and just initial thoughts. And so that was like a very critical time where we were all locked down. We have this cool idea. Let's just crank this out. So we had an MVP pretty quick. And then we actually launched it in June 2020. And I was already very stoked about the product. As long as it did its core thing, which is connecting people through this shared love, I knew it was like a proper test, a good enough test to see if this is a worthy endeavor. VICTORIA: That's really cool. So was there any surprising feedback that you got from that initial beta testing? BRIAN: Yeah. [laughs] So the initial concept was essentially like a Tinder for plants. [laughter] And I was just thinking about this idea, like, if people could just swipe on plants they've uploaded, and then if both people liked a particular plant and they swiped on each other, and they matched, it would open up a chat that would connect them. And it took the...one of the issues with bartering, in general, is people are like, "Oh, I'd love to swap that with you." And they're like, "Oh, what do you want to swap? What do you have?" And a lot of times, people don't align with what they have and what they want to swap. So I figured that would get this kind of friction out of there, but still, the core was connecting people. And then, very quickly, people found it fun. And this is still a feature right now on Blossm, which we've moved to the homepage. And it got a lot of engagement and interactions on it. But one of the simple changes was like, all right, maybe this is not the optimal way to present these plants people are uploading. Nick actually drew a lot of inspiration from OfferUp. And he was like, "Oh, this is very simple. This is a very clean way to present these things." So we started getting inspiration from OfferUp, and we changed that kind of swipe card functionality just to a scrollable grid. And that was a great insight on his part, and some of that has been core to the product from that point on. VICTORIA: That's so cool. So I can just go in the app and see a whole list of plants that people are willing to trade. BRIAN: Right. Actually, I would say another thing that happened very early on, too, was, once again, bartering is not the most efficient way to exchange things with each other. And within weeks, we're seeing people being like, "Oh, well, what do you want to swap?" And then people are like, "Oh, well, I don't want to swap for that. I already have that." And then other people are like, "Hey, I don't want to swap anything. I just want to buy it." And then other people are like, "Hey, I don't have anything. but how do I get stuff for you?" So right away, we opened it up to full marketplace kind of functionality with buying, selling, and trading. And we didn't have necessarily any payment system to facilitate that. We would just connect people. And then they would use Venmo, or Paypal, or Cash App, or things like that. VICTORIA: That makes sense. MID-ROLL AD: Now that you have funding, it's time to design, build, and ship the most impactful MVP that wows customers now and can scale in the future. thoughtbot Liftoff brings you the most reliable cross-functional team of product experts to mitigate risk and set you up for long-term success. As your trusted, experienced technical partner, we'll help launch your new product and guide you into a future-forward business that takes advantage of today's new technologies and agile best practices. Make the right decisions for tomorrow today. Get in touch at thoughtbot.com/liftoff. VICTORIA: Now you kind of got your core features figured out, and you see people engaging with the app. What are you the most excited about on the horizon in your roadmap? BRIAN: We're about to actually finish the TechStars accelerator next week. Next week is our demo day. It's been such a great experience, and I feel blessed. But during this time, we're really figuring out, like, what's our big vision with Blossm? And we kind of went back to really harp on, like, we're more than just an e-commerce or marketplace. We're like this special passionate community where people can do this buying, and selling, and trading. One of the things that's been the trend for years now is instead of just photos; we're about to integrate some video functionality. This is a lead in to the bigger goal. And the idea is creating this...we're calling this full plant experience focused around live video where people can engage with each other on this totally different intimate level and can really showcase their plant collection and give each other a plant tour. How do you take care of this plant? Is another big topic that always comes up. It's just hard to really decipher what's wrong with something just from ecstatic images. And we imagine we could have live plant help. And then people can just show their plant up to the camera and showing a really holistic view of what's going on. And so this vision of live with video and creating a more complete plant experience centered around really using the community as this way to promote that and really build that even further. VICTORIA: That's very cool. I think I've talked to you a little bit before about this giant fiddle fig I have in my office. [laughs] It's going to the ceiling. And I got it from Home Depot, so it may not be the highest quality. And I've asked you about, like, is it alive? It keeps dropping leaves. So if I had a video and I could just show you around and show you where the leaves are browning a little bit and where it's not growing, I could see the value in having that interaction like that. BRIAN: Yeah, exactly. No one's doing that. And definitely, we want to keep innovating the space. We were first to market many years ago. And then, actually, we have some direct competitors that are blatantly just copying us, like copying email templates, features. And on one hand, it's flattering, but also we realize we have to be careful about positioning and making sure we stay ahead of the curve. And we think this is going to be the future and something that delivers really extreme value to this demographic. VICTORIA: Absolutely. And you mentioned you're a part of a tech accelerator. Could you tell me a little bit more about choosing which program you went to and how that's affected your overall approach to your app? BRIAN: Yeah. So last year, we added two more team members, so actually Nick's younger brother, Calvin, we poached from Amazon, which felt really good. [laughter] And then we had another friend, Ari Olmos, who we knew had experience in the startup world. He started, or I think he was, co-founder or CEO of a few other social mission startups. So he understood just the fundraising process was probably the most critical trait we're looking for, just someone that can help refine our systems, our processes, things like that. So now we're a team of four. And we were like, all right; we need money if we want to keep this alive. And I've been full-time since the idea conception. Ari joined full-time. Nick and Calvin both had jobs. But we just knew it's critical for a high-potential startup like ours to really grow; we needed some sort of fundraising. And it seemed logical. We gave our shot at proper fundraising with some angels and VCs last year. There were very encouraging signs, but didn't necessarily translate to any checks being written for us. And then we applied to a bunch of accelerators; Y Combinator and TechStars were our top two. We got a few rounds of interviews from TechStars, and the director, Ryan Kuder, who's great; he's actually based in San Diego. And I credit him to definitely being a key component here because I knew he really liked us. He saw the really good complementary team we built. We had a pretty mature product with traction and an active user base. And we accepted, and it did a lot of things for us. It was our first proper fundraising beyond a Kickstarter. So Nick and Calvin became full-time once we got in. And then we just had this, like, you have access to this massive network and get this really detailed one on one mentorship. We had almost six or seven mentors that we met with weekly. They're always available to help. And probably the coolest thing about it is they're just there to help you. There's no two-sided, like, I'll help you if you can help me. We are here to help you build, grow, accelerate your business. And they gave us really good insights on direction, really formalizing how to build in systems that will last much longer than the three month-program that essentially just mimicked a lot of stuff we've done on the program within our own team, like hosting little daily stand-ups every day. We've always done weekly meetings but using that time more efficiently, knowing how to test and measure more effectively. They've really just refined our company to be a proper business instead of four dudes trying to make this cool plant app. VICTORIA: That's really cool. And I wonder now, like, after you've had this experience, what advice would you give yourself if you could go back in time to when this all started? BRIAN: First thing that popped in my head was...and I kind of knew this going into it, like, this is a big project that needs time. Things that prevent startups usually is, one, you don't execute, or you just don't start it at all, or you give up too soon. And I guess I would tell myself, hey, things are going to be all right. Like, just keep sticking with it. And you're getting all the signals; this is something substantial and worthwhile. Just be patient, stick with it. Survive those valleys, and there are peaks on the way. And getting into TechStars was the ultimate validation. Yeah, I feel extremely blessed to be in it. And I think we're poised to do big things this year. VICTORIA: That's very cool. So you've mentioned those peaks and valleys and how much time you have to spend on this type of starting a company [laughs] and building an app. How do you balance that with also having a regular life and going surfing and climbing? BRIAN: It's tough to find your specific balance and especially during the accelerator where I didn't want to waste any opportunity. So there were a lot of times...I think January was a month straight no days off. And actually, I was injured so I couldn't surf, climb, or even play piano, so all my outlets. But just be okay with setting aside time to where you don't think about work at all. And it took me a few months to reach that point. And I found that as long as I have one activity or some exercise per day, either I surf or climb, I'm good. I don't mind working 12-plus hour days if I do one of those. And then just to allocate one day of the week where I am like, I do a couple of hours in the morning. But one mostly day of don't think about work, just enjoy life. And that has been enough for me to feel refreshed going into next week. And so I think I got a good rhythm, and I got a good formula for what works for me. It might be different for other people, but it's important to set aside time where you don't think about it. VICTORIA: Right. Yeah, just to turn off your brain. Sometimes I find, like, you know, you mentioned surfing and climbing helps you do that because you really just can't be on your phone [laughs] when you're out there sometimes. BRIAN: Right. It's kind of funny because I'll almost say it's a catch-22. But sometimes, those things can be distracting, but they're also necessary for you to be focused if that makes sense. [laughs] VICTORIA: Yeah, totally. Let me bring it back to plants. What is your favorite house plant that you have right now? BRIAN: Man, it's changed over the years, but I do have one. It's like the most popular high-in-demand one; it's the Monstera albo. Its common counterpart is the Monstera deliciosa, which is all green. This one has white variegation on the leaves. They're just inherently beautiful plants. And anyone that sees it can be like, "Wow, that is gorgeous." But I have one specific one, and why it's my favorite is that years ago, I was telling a climbing friend about the app, and I guess the app is out by now, but telling her about it. And she's like, "Oh, my grandmother was a huge plant person. My mom now takes care of them. I think she has one of those Monstera plants with the white on it. It was my grandma's though." And I was like, no way. I have to see this. And when I get there, she has this massive one, incredibly mature and old. I think she said it was almost 50 years old. I can't even believe this. VICTORIA: Wow. BRIAN: And then I asked her. I was like, "Hey," [laughs] I was like, "Can I have a little bit of that?" [laughs] And she was like, "Oh yeah, just go ahead. This is a plant. I'll grow it back." And I felt a little bad because I took a nice big cutting like multiple leave cutting. And she absolutely did not care and just was so happy. Turns out she had three of these like big mother plants. There's one cutting that had very low variegation, so it showed barely any white on it. Over time, I grew it out. Every subsequent leaf kept showing more and more white. And now it's just so beautiful. I check up on it every day, and every new leaf is just more beautiful than the next. And it's a special one. And it was gifted to me by my friend's mother. It started off like you can say a lowly variegated plant, and now it's just thriving and beautiful. So it has some history, and it came from a friend. So without a doubt, that's my favorite one. [laughs] VICTORIA: That's very cool. Yeah, I know those Monsteras that you're talking about. They're really interesting-looking plants. I kept one alive for a short time, and I'm very proud of myself for it. [laughs] So I'm interested in using Blossm to keep my plants alive possibly. But that's awesome. Thank you so much for sharing that. What else can I ask you? Is there anything that I should ask you that I haven't yet? BRIAN: Well, we could actually segue from what you just said. This is an interesting thing. So I think everybody who's been through this has gone through this exact process. So they have a couple of plants. They're like, what's wrong with my plant? How do I take care of this? And they go down the Google rabbit hole, or they happen to buy one of these plant ID plant care apps. Usually, they're like freemium. You get a couple of free tries, and then you have to buy a subscription or whatever. I also did this. And I was like, you know what? These apps suck. They just don't work, or they're too general. The best plant advice you can get is from other plant people because there are so many variables. Like, which growing zone are you in? What kind of light do you have? What's your ambient humidity, temperature? All these factors come into play on how to properly care for your plant and what could be wrong. And the best advice I've gotten was from other plant people. And so we have, like, beyond the marketplace grid, we have this fully functioning community forum essentially like a Facebook group in a way where people can post questions about what's wrong with my plant, or what plant is this? Or share memes and just nerd out. And it's been such a critical component I think of Blossm to cultivate this community. But it's also just very functional and effective because really the only way to get that advice and care information is by interacting with other people. That's something we want to build upon in the future too with that whole live and video capabilities. VICTORIA: Yeah, that makes sense. Just a funny story, sometimes I'll call my mom who's a big plant person, and ask her questions, and she's like, "Well, you should go check that book I got you." [laughter] It's like, it's not helpful at all. [laughs] But yeah, no, I think that's right. I think people get excited about AI and image recognition. But sometimes it's still easier to get a real effective answer from a human. BRIAN: Yeah, I'd be curious with the whole AI getting its spotlight right now. And without a doubt, I could see applications there for it. Right now, I don't think that exists, but I'm very curious and excited to see what happens with all of it. It's going to be cool. VICTORIA: Yeah. Well, that's awesome. And I am excited that what Blossm does is really create this community around plants and learning about them and with the people around you. Do you have any final takeaways for our listeners? BRIAN: Hmm, final takeaways, you know, shameless self-promotion; if you love plants or you're getting into plants, Blossm is tailored for the plant person, which is what I think makes it special. And more general, I never intended to be the entrepreneur. I never intended for Blossm to be like, oh, this big tech company. I just had something I was super passionate about and wanted to see come alive for myself and for other people. Without a doubt, that passion paired with perseverance, I think, are critical attributes to follow any idea to the end or to some level of success. So don't be afraid to take that leap. By no means has it been easy. It's been the most difficult thing I've ever done but also the most rewarding. It's been really fun too. So if you got a cool idea, maybe try to build it out, find a good co-founder, a good team. Give it a go and create something for everyone. VICTORIA: Well, I really loved your story, Brian. I think you've found your niche. You built something. You took advantage of the time you had when you had it, and look where you are now. [laughs] I'm very excited to see what comes next. BRIAN: Cool. Yeah, thank you so much for having me. This has been lovely, and yeah, stoked to listen to the next episodes too. VICTORIA: Excellent. You can subscribe to the show and find notes along with a complete transcript for this episode at giantrobots.fm. If you have questions or comments, you can email us at hosts@giantrobots.fm. And you can find me on Twitter @victori_ousg. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com. Special Guest: Brian Feretic.

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On today's episode of the ACCEL Podcast, Scott, Eric and Alex welcome Brian and Matt from the ACCEL Gaming Division. On Part-One of this Two-Part Series, Brain and Matt discuss Blockchain, Play-to-Earn (P2E) Games, NFTs and how their integration with blockchain technology is not only growing, but accelerating to new heights of adoption across multiple chains. For more information on ACCEL , please visit www.acceldefi.com or our Link Tree: https://linktr.ee/AccelDefiFor educational resources related to ACCEL and Crypto in general, please visit ACCEL University on YouTube using the following link: https://www.youtube.com/channel/UCJDNIqPTp9kjsMPmPo119Zg Episode Transcript:[Alex] Welcome to the ACCEL Podcast. Today we have very special guests for you, Matt and Brian. They head the gaming division here at ACCEL. [Alex] Can you tell the listeners a little bit about yourself, your background in gaming, and how you found yourself developing P2E Games in the crypto space? [Brian] Thanks again. As you said, my name is Brian. I've been an avid gamer pretty much my entire life. I've just been working into project management and programming for a few years now, and basically I've just brought everything together when forming this division as it appealed to all of my skills that I've built over the years. And I've been working on building this division from the ground up. So I am very excited to have a couple of people in our team. And honestly, it's been pretty much a dream of mine. I've always wanted to be kind of a project manager programmer for a small indie company. That's kind of something that's always been a dream of mine. So the simple fact that now I finally get to do it is fantastic and I'm looking forward to the future. [Alex] Thank you very much for giving us a little bit of information on your background. Is game development something you went to school for, or were you self taught? [Brian] That's a great question. I was self taught. The only kind of experience I have is some coding classes when I went to University, but I never really used them for gaming. It was just got through the courses and at the time that wasn't something that I planned on using. But now that I'm here, I'm really glad that I decided to stick with it. Those late hours of going through code, it's finally going to pay off. [Alex] Wow, that's fascinating. Hey, Matt, can you also give us a little bit about your background and how you got involved with ACCEL? [Matt] Absolutely. I've been in eSports. I was an eSports pro in my 20s. I actually have been involved in gaming for about 18 years now. Always dream. Just like Brian, we've been friends for ten years. We've gone through a lot. We've discussed a lot of things that we want to do, and this is sort of like making all that happen. I personally come from an engineering background. I am pretty good with numbers and like I set up both developed games simply and I've worked on different games just through the variable aspect. And I've been very involved with technology for the last ten years. So when Brian told me about this opportunity, I thought it was a great time to come in, materialize all the things that we've discussed over the years, just bring them together and make this an amazing environment. [Alex] Thank you very much for giving us that information. [Scott] So I guess that kind of leads us into our next question. I think there's a lot of kind of confusion around gaming in the crypto sphere and kind of how everything ties together. There's a lot of different words thrown around that I think kind of confused people between these console games and these mobile games that you can play on your phone, ones where you can actually earn rewards, ones where you can't can you kind of just give us a little bit more insight on what exactly you guys are going to do in the gaming division, how that ties into crypto? [Brian] Yeah, absolutely. So mobile and console games, they all use a standard protocol, and basically there's going to be a way that we can be able to connect them to the blockchains. As of right now, that's the challenge. But I believe that what we can do is it's definitely coming along. It's faster than you think. Right. People have been playing games for virtual tokens for years, and really the only change now is that they be playing with a stake and earn real world assets. So, you know, you basically instead of farming your own Gill, gold, whatever the ingame currency is, basically. Now what you can do is not only can you throw money in there, but there are also ways to earn the money through various tasks, et cetera. And it's basically a great community effort because you're going to have people that are going to be let's say all I want to do is be a blacksmith. Right. Well, everybody's going to need a sword. So you're going to have those one on one interactions in transactions with people just like you and me. And we'll be able to use centralized token or coin or what have you. And we'll be able to do all kinds of trading. And I think Matt can actually elaborate a little more. [Matt] Absolutely. What basically is happening here is that before, if you went to any game, you'd earn that game's currency, right? You could earn gold, you could earn Gill, you could earn, like, little jewels and Candy Crush, et cetera. And all those things actually allow you to participate or buy items using that in game currency. But those items and those things are only limited to that game, and you could never translate it into something outside of the game. You could be the best player in the world in Candy Crush, but you're still going to get beat up at school if you're a nerd happened to be honestly, it was an experience. And the good thing about these games, the strong thing about these games is they can appeal to both the time and skill that you can put in. And that skill doesn't always have to be related directly to one task. Right. Like, for example, you have people with different careers in the world that do different things. And in the gaming, in the meta verse itself, you can tie all this together that people are going to be very good at. Some people are going to be very good at racing, some people are going to be very good at guessing a number off of a deck. And some people are going to go more into the creative side. You know, they are going to design characters, they're going to build certain items, they're going to build a lot of different things. So there's always going to be a discipline that appeals to anyone. And like, as with horse racing, where one person wins and everyone else loses, you actually have all these opportunities for different people to come together and use the things they are good at, use the things they want to do, and they all have the same possibility to earn something that they can just take back with them after. [Scott] Okay. So I guess my follow up kind of question to that then is these Play-to-Earn games have kind of been around a while. Why do you think you're seeing this trend kind of catching on now? What is kind of that ignition behind it? Do you think it's the blockchain interaction? Is that kind of that big selling point that's really bringing the play to earn games, too? We're seeing them really rise to the top right now. [Matt] Yeah. I think one of the key reasons is exactly what you mentioned. Because for everything that happened before, one of the big elements was that there was always, well, not really in games, but like, if you take it to real world, there's always going to be someone in the middle regulating transactions between players. So, for example, this is a very simple example. If anyone out there has played RuneScape, I'm sorry for you. But Besides that, if anyone out there has played RuneScape, you've gotten like scammed at least once. Like, some person comes in and they want to sell you something and you give them your gold because like, okay, I want the site, I may give you my goal and then the person just disconnects and disappears and you basically got stiffed. Truth be told, it's just a game currency. So it wasn't really that much of a hurt on you because you really feel bad when it happens. And Blockchain Technology just has had its peaks since 2019. If I'm not mistaken, it was first developed around 2009, but it's really seeing the strong adoption today. And the important part of Blockchain Technology is that it can do two things that usually didn't happen before. A it can regulate transactions between two parties without having like a physical third party having to exist. And the second one is that is a trust system so you don't actually have to go and trust the other player to make your transaction. Because it's going to be written in code, it's going to be hashed and there's no way you're getting out of that. No one can really stake a different item in transaction than they originally did. Scams are there like scams happen every day, but it's mostly like 99% of them are mostly due to a human factor. And that's why the fact that you can now actually have people playing against something that they don't need to trust, they know there's no way to go around it and they're going to get the returns of what they're putting in. It's not a scam, it's going to be like written code. The smart context is going to be there. It makes people a lot more confident to stake money or stake different sort of assets in these games. Kind of like when people in the 90s were afraid to put their credit card information anywhere because they all thought like they were going to get cloned and scanned. And now like you'll just go to a Russian site because you wanted to buy that PDF, that one book that you need to print for your son and just put your credit card info in weird Russian site with like not thinking about it twice. [Brian] Also, one thing I'd love to add is I believe now more than ever people actually want to feel like they're a part of something bigger, right? So let's say you've got your avatar, you're going in the Metaverse and you want to buy paranike, whether it's going to be for your avatar, like The Sims where you can dress your avatar, or maybe Nike will have a special NFT for X amount of sales. So either way you've got the people who, I just want to make my avatar look cool, I want to spend it on this, that or the other. And then you've got other people that are, I'm doing this for the money. As far as like, this is a really cool limited edition Nike NFT. I can only imagine we're going to be bringing in some big names very shortly. And one of the cool things is you don't necessarily have to be quote, unquote whale to own a piece of the pie, right? You could have in the Metaverse, you own a piece of land and then that land has the shoe store in there. So someone who comes in and say 1000 people purchase that land, anybody who gets sales from that Nike shoe is going to disperse equally. And so everyone's going to be able to not only say that they've got some connections with brand management, but also just sales get X amount of tokens or whatever. And then you use those for basically whatever you'd like. So it's just really cool. [Eric] So Brian and Matt, you guys have done a diamond explanation of giving us a little bit of your background, how you're now starting to tie into ACCEL. So for our subscribers and maybe a couple more of our more veterans in the ACCEL game–I'll put myself in that category–give me a little more insight if both of you could, or a little more understanding on exactly what P2E Games are, and with that being said, exactly how they are going to now tie into The Blockchain, and I know you started to get into how we pay for it. I know, Matt, you had alluded to your son or your daughter can tie in a credit card, but bring it back a little more to the basics, and just let me know about the P2E Games, how they tie into The Blockchain, and exactly how it's being monetized. [Matt] P2E or like Play to Earn is just basically any game that gives you a reward for playing it. You can even define like, if you loosely define it, you can even call P2E to those little machines in Japan where if you exercise, you do ten squats, you actually get a train ticket. And it's sort of the same principle that comes in there. And people relate this a lot to casinos for that reason, because you basically go in, stake your money, make some bets. Betting is one of the many forms that P2E has. And I think there's a hidden gem that NFCs will bring that still hasn't been tapped into and relates directly with fractal ownership. There's a lot of artists that have talked about this. It's basically sort of selling a part or selling a piece of, for example, the right to your music. Like, if you have a favorite artist, how cool would it be if you could own a small percentage of the rights to their music? [Brian] Right. And NFT's in general, all these tokens would actually make for a strong case in which people can bring their resources together. We can form a pool of 30,000 people, and we can all pool our ETH. And the good thing is no one has to trust anyone else and get that pulled resources and get that pulled money to let's say we're all a big fan of Nike. You want to buy a percentage of Nike and sort of be able to bring the Nike brand into the Metaverse or get some dividends out of the Nike shares and et cetera. That's a strong point of NFTs and I think it's going to be seen a lot more because people are starting to realize there are a lot more uses to this than they thought originally. [Scott] Yeah, I think that's one of the craziest things we're kind of seeing in the blockchain and crypto areas. A lot of people don't really want to jump on this innovation and it's one of the things we're really seeing is everything is tied together and in our next episode we're going to kind of touch on this, but we want to leave you guys on a little bit of a cliffhanger. But in the next episode we're going to kind of explain to you guys how this all ties back together. The Metaverse, the NFTs, the Play-to-Earn, the blockchain and how they're all in one. So we're looking forward to this next episode. Please join us again with Brian Matt. It's going to be awesome. Bye.-----------------------------------------The Information presented in this podcast is provided for educational, informational, and entertainment purposes only, and without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose.The Information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.The Information provided from or through this podcast is general in nature and is not specific to you, the user or anyone else. 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Results Coaching Model with Brian Lovegrove Brian Lovegrove has been on his journey of personal growth and professional development since the age of 17. Inspired by Tony Robbins, he has created not only a catalyst but a unique approach and process to helping others, like you, achieve their goals. He believes in providing & building upon the knowledge most coaches provide by practicing these lessons and building a HABIT! Using his "5 Keys of Success" in his coaching, he is a firm believer that if these keys are used, failure is all but eliminated. In this episode, we learn about all the tactics Brian uses and has honed over the years of being a coach and we did into a few of these methods during our conversation. As always, thanks so much for listening! Joe Brian Lovegrove Leadership Developer and Results Coach Website: https://brianlovegrovecoaching.com Facebook: https://www.facebook.com/brianslovegrove LinkedIn: https://www.linkedin.com/in/brianlovegrove/ Live Masterclass: https://www.becomeunstoppable.info 5 Keys to Success Podcast: https://5-keys-of-success.simplecast.com/ Unleash Your Fear eBook: https://www.unleashyourfear.com/freebook Email: lovegrove@lovegroveltd.com Podcast Music By: Andy Galore, Album: "Out and About", Song: "Chicken & Scotch" 2014 Andy's Links: http://andygalore.com/ https://www.facebook.com/andygalorebass If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. For show notes and past guests, please visit: https://joecostelloglobal.libsyn.com Subscribe, Rate & Review: I would love if you could subscribe to the podcast and leave an honest rating & review. This will encourage other people to listen and allow us to grow as a community. The bigger we get as a community, the bigger the impact we can have on the world. Sign up for Joe's email newsletter at: https://joecostelloglobal.com/#signup For transcripts of episodes, go to: https://joecostelloglobal.lybsyn.com Follow Joe: https://linktr.ee/joecostello Transcript Joe: Hi Brian, welcome to the podcast. I'm looking forward to having you on so many things I have to ask you, because you hit a core thing here with training, personal development courses, all of these things that I read about. And it's going to be interesting to find out your answers to these burning questions I asked. Brian: All right, Joe, I'm looking forward to it. Let's get rocking and rolling here. Joe: Awesome. OK, so you have to bear with me, because I literally do this with every single person on my podcast, is that I think it's important for my audience, who I believe is mostly entrepreneurs, whether they're currently doing their thing or they want to do their thing or they're struggling, doing their thing or whatever it might be. I think it's important for them to know the back story of the person that is on, because it's important to understand the development of where you came from and how you got to where you are today. And I think a lot of those things that you talk about actually people listening, going, oh, yeah, I've been there. I did that. I remember that. So I always leave this open to saying you can go back as far as you want, because if something in elementary school created who you are today, I want the audience to know about it so you can start wherever you want. Brian: Well, people ask me how I got introduced to personal development in the first place, and I actually go back to junior high. My dad was a commercial real estate broker and I grew up in Montana. And any time we would leave town, we would go on a long trip. And so he would pull out these tapes from work. And this was, of course, back before the iPods. The noise canceling headphones in that great, wonderful device that many of us grew up with, the Sony Walkman, Joe: Near Brian: Whatever Joe: And dear to my Brian: He Joe: Heart. Brian: Put into that. Yes. Yes. And so I got stuck listening to whatever was in the tape deck. And so I got introduced to guys like Earl Nightingale, Jim Roan and my favorite Zig Ziglar. And listening to those guys, Dennis Wailea, on and on and on and on, they taught me what it was to be an entrepreneur. And I remember Ziggs saying, treat every job as if you were the owner of the business and those HAQQ series that I listened to through junior high and high school shaped me in my choices in college. I actually got a degree in professional sales because of a I was originally going for a management degree my first year. My sister was two years ahead of me and she told me after my freshman year and says, you know what, Brian, you might want to consider changing majors because the people that I know that are graduating with management degrees are struggling to find jobs. And I went back and that that prompted me to ask a really good deep question at all. I don't know, 18. I asked myself, what career, what major, what level of information do I need to get while you're at college that would regardless of what happens to the industry, because I knew, you know, it's going to be out here in the marketplace for over 50 years. What degree do I need to go get that will? Regardless of what's going to happen, the ups and downs of the industry, whether we end up in another recession, we end up in another depression, that I would always have an opportunity to have a job if I wanted one. Brian: And that always brought me back to the sales aspect that Zig always mentioned, because, again, he did a lot of his sales around the Depression area and that that aspect of life where it's like how do you survive? How do you keep going in those areas? And it's really the salespeople that make the world go round. And so that's what led me to a sales degree. The other decision that I made when I was 17 was I got introduced to a guy named Tony Robbins and I bought his first tape series. Imagine a freshman in college spending probably a month of his earnings on a tape series. And I bought Tony's unlimited power. I still have the tapes are used today, actually gone and bought a second set because I wore out one of those tapes so that because I listened to it so much and I followed Tony ever since, I actually helped promote and put on his seminars for one of his franchises. And along the way, I've always been doing personal development, personal growth, and, you know, a lot I loved it. I just ate it up. But one of the big challenges that I ran into, I turned 40. Brian: It was like, why am I not far enough along? I've been doing this for 20 years. Why am I just here? Because at the time I was struggling to pay the bills. I was struggling to get by. My wife was working. We had two small kids. And I thought by the time I turned 40, I would have been much farther along by now. And so in this process, I realized it wasn't until much later that learning is not enough to make lasting change. I was actively learning. I was seeking the puzzle pieces, the pieces of information that was missing in my life. And I figured once I learned that then life would be easy and I'd be making all this money. But that never happened because I never did. The one thing that I learned all the way back in the beginning from XG is you have to do it until you get good enough at it, till it becomes your new normal. And only then, once you've applied and implement those strategies in your life, will they actually work for you. And you've got to do it long enough to get good enough at it and then continue to stick with it to where you can actually allow the compounding effect to, you know, you slowly creep and then you kind of turn that corner and it goes straight up. And it took me 50 years to hit that. Joe: So I'm going to go back real quick because I want to know what triggered you to buy that Tony Robbins course. You know, I know you were listening to this stuff in the car with your father on the Walkman or whatever else you were doing it. I mean, a kid at 17 doesn't do that. So what triggered it? Brian: Well, I had read the book, his book had come out and I had read the book and I really loved he had such a different style and he was talking about different things and he was talking about the things in the mind and he was talking about he and the different aspects there. And a lot of that was like, oh, my gosh, this stuff makes so much sense. And I was applying some of those strategies and I was seeing specific results. And I was like, and that's really what made me buy in. In fact, that's probably one of the few programs that I really started implementing strategy on. One of the big strategies you talked about was marketing Meeri, and it was one that I specifically used as I got into my initial first jobs and sales career. But I used on a consistent basis to help me actually get as far as long as I did. Joe: Ok, I'm still going to ask the question, because I'm not sure if you answered it yet. Why would a 17 year old buy the book like 17 year olds don't don't get into this stuff. So and I think it's important to figure out what triggered it for you. Brian: Well, again, I think it has to do with that was the next step, I the company that was putting those out was Nightingale Conant Joe: Yeah. Brian: And my dad would get those and I probably was home. I don't remember where I was when I got it. I might have gone home for Thanksgiving or Christmas. And I grabbed the magazine I love looking at because again, I've been doing this for a number of years now. And I was like, what? What's the new stuff they got? You know, Wayne Dyer was there and you know, you know who who are who's the new people? And there was this new one from this guy named Tony Robbins. And I don't know, I guess it just resonated with me. And I think it was seventy five bucks. And it was like and to be honest with you, I really can't say what prompted me to go. I want that. Joe: Mm hmm. Brian: But I think it was more of the sales pitch in the description of what it promised me. Joe: Got it. Brian: More than anything, that's what I would say it was based upon the results that were promised, based upon the description of the tape series. Joe: Ok, so you've been around that sort of thing for a long time, right? And if correct me if I'm wrong at any point, because I want to make sure this is super clear to the listeners, is that from what I get of what we're going to go still back, I still have other stuff to do, but I want to kind of set the stage of your expertise or what you believe is, is how you can help people. As you said, you can buy all the courses and attend all the conferences and do all of this stuff. You've said it here. You set it on your website. The enthusiasm kind of goes away when life gets in the way. Right. It's basically that simple. You come back from the high of of being at a conference or are listening to something and then life literally just gets in the way and you don't get the things done that you promised yourself that you would. So my understanding is that you are basically this coach that is going to keep you on track. Whether life gets in the way or not, you're basically going to be this person that is going to bring people along through all of this and keep them accountable to what they promise themselves that they would do and make sure that they do all of the things that are needed without shelving anything because life got in the way. Is that fair? Brian: Right, it is because, again, you know, Tony is great if you've ever been to one of his big events, you P.W. he he can talk nine thousand people into walking across twelve hundred degree recalls in a day. Joe: Yeah. Brian: By the end of day one, he's got you walking across Coles. But again, how do you can't maintain that energy and that excitement and the momentum of that event for weeks, months, years to get to where you want to go? And Tony has admitted that this is an area that he struggles with, is how do I get people to keep going? Joe: Mm hmm. Brian: Which is one of the reasons why he has his coaching program that you can go and pay tens of thousands of dollars to get a coach for a year, and it's one of the reasons why he actually created the pyramids, Madonna's training group, to train people like me to be coaches that help people implement his strategies. And that's really what it comes down to, is how do you take the strategies that, you know, you need to be doing and implement them? One of the biggest challenges in society today is we don't teach people discipline for the most part. There's a few places that that happens. But outside of that, it's not encouraged. In fact, it's almost especially in today's society, you're not responsible, you know, being responsible for yourself, being accountable. That goes out the window. And yet that's how you are going to be successful. That's how you're going to get to where you want to go. Unfortunately, society is teaching people to be cheap and to live in mediocrity. That is not how you're going to get to where you want to go, because I'm assuming that most people here are entrepreneurs. Joe: Mm Brian: They're Joe: Hmm. Brian: Entrepreneurs for a reason because they are sick and tired of working for somebody else's dreams. And so they want to pursue their own dreams or they think they can do it better. And so they're out there trying to do it on their own. But there's a myth that goes with that is the fact that they have to do it on their own, they have to try to figure it out all by themselves. And some of my best clients are the people that have gone to school to learn how to do what they want to do, a chiropractor or a massage therapist, the tradesperson, they know how to either pound nails Turner Ranch, adjust somebody's back, but they don't necessarily know how to do this thing called run a business. And so there's certain aspects that come into play because my my ideal market is that small business owner, entrepreneur and professional who's out there wanting to make a difference in their world, in their communities and their lives to make a bigger impact. But they're struggling to do that because they're trying to deal with all of the distractions and all the stuff that's coming at us. And it's like, how do I get a hold of that? How do I how do I focus on those things that truly matter that are going to move the needle for me and my business? And that's really where I come alongside them. Brian: And I say that specifically because I can't take the journey for you, but I'm happy to take the journey with you. And see, that's where the big challenge is, is a lot of people feel like they go to the seminar, which is, OK, here's how you go climb a mountain. Here's the equipment you're going to need and what happens to the trainer. They get all loaded up. They load them up and they say, go have fun. And they go walking down the path. And the river that they were told was a small creek is now this raging river, the bridge that they were supposed to be able to go across was washed out. And it's not like, what the heck am I supposed to do now? They weren't prepared for what they're going to experience or they didn't get enough information. That's one of the things that I always felt in the training classes and seminars I went to. I always felt like there was a piece of information missing. And there's only so much that somebody can teach you. You actually have to go experience it for yourself in order to develop those nuances that are really going to make a difference for you. Joe: Yeah, and I think that there are very, very, very few people in the world that can and you hit it on the head, the discipline that they will actually take, what they've learned, whether it's in a chorus, it's at a seminar or whatever, and actually implement it and be accountable to themselves. I think that's a really, really small pool of people. And so Brian: It is. Joe: Because the Olympics just happened, if we even made an analogy of like you went to class to become a gymnast and you said in a week long seminar to learn all of the different moves and tricks and flips and things, and then you just don't go and show up and start doing that. You have a coach that's watching you Brian: Right. Joe: And and helping you understand all of those things and the mechanics of it. So to me, that's what you're that's really where you help, is that you are there to, like I said earlier, to to to to push them, keep them on track, assist them with when they Brian: The. Joe: Hit roadblocks. You're by their side throughout the whole process. Right. Brian: Right, and I think so many times we have this misunderstanding because we've been taught that learning is going and sitting in class. And that's not necessarily true, but unfortunately, the self development industry has taken this model of let's bring them in, sit them down, overwhelm them with information, make them feel like they're drinking from a firehose so they feel like we've given them a tremendous amount of value and then send them on their way. And so the more people we can pack into that room, the better we make more money that way. Yeah, we actually end up doing a disservice to the customer, to the client, because at the end there is no support. And so how do you make sure somebody has what they need in order to actually achieve the results they want? And that is challenging along the way. And we've created several ways for people to do that because, again, money gets in the way. I mean, if you have enough money, you can find somebody that's going to come alongside and help you get to where you want to go. Joe: Mm hmm. Brian: But we actually started one hundred bucks a month. We've got programs where you can get that at least some help along the way to get you to where you want to go. And we grow from there. But it comes down to this process of how do we get you to take the actions you know you need to take? How do we get you to move forward consistently? And it's just like the example you used is great. The one that I love to use is the example of going to get into shape. You don't go to the gym for three days straight and be done. That doesn't cut Joe: It's. Brian: It. You know, usually you go once for a few hours and you're like, oh my God, you wake Joe: Yeah. Brian: Up the next day and you can't move. And so it's like, why would you expect you to be able to do that in the other areas of your life? Joe: Yeah, I go to the gym five days a week and I still am like, why don't I look better? So you're really in a great position to do this, because how many years did you spend in that whole seminar course kind of world? And I know you're still involved in some of it, but you helped run Brian: Well, Joe: Some Brian: I Joe: Of these. Brian: Yeah, I help promote Joe: Yep. Brian: To put them on the grand scheme of things, I didn't do that a lot. I was probably with them for maybe about a year before the franchise partnership broke up and therefore the franchise collapsed. But it was a great opportunity and I learned a lot going through that process. Back in starting in 2003, I joined Toastmasters and worked myself up over the number of years to become a semi-professional speaker when I wrote my first book and got kind of started in that. But I never really got traction and got that off the ground in this process. One of the things that happened was I shifted from Toastmasters into a leadership role in nonprofit organizations, specifically to the Boy Scouts. But one of the things I saw was because, again, I was focusing on the teaching aspect because I love watching that light bulb go off. But what I didn't realize was because I didn't see it in my life at the moment, at the time yet was that, again, teaching them was good. But coaching them is better because, again, it's about growth and it's part of my all the exercises and things I've done. I mean, I have done it easily. Quarter of a million dollars on personal development. I have bookcases and bookcases of books and tape series that are, you know, this is the pretty self I have, you know, boxes on wooden shelves and storage units full of books and stuff that I've consumed. And it's actually one of my coaching partners mentioned to me and from one of the coaching programs I was in, he says she said, Brian, you have a vault of ideas and strategies to help somebody to move forward. Brian: And so when they need it, you can provide it for them. And so really, it's about getting people to move. It's not about trying to teach you something new. It's about how can I get you to move forward and understanding how to motivate somebody to move. And he talks about the pleasure and pain principles. We move away from pain a lot easier than we do towards pleasure. But many times we only use pleasure as the incentive for us to do something. And a lot of times I'm working with some basic activities with somebody. One of the things that you can see it here in the video, if you're watching it, is my incredible results, 928 Challenge Journal, which is basically spending about 20 minutes each evening documenting what happened today, well, as planning tomorrow. And the first challenge that people come up with is doing it every day. So far, nobody has done ninety one days straight. There's a few that have come close. But on average, it takes people a good month to get into the habit of consistently writing in their journal. And so, again, it's about understanding what it takes to get people to move in the direction they have said they want to go and using those two buttons and pushing them at the right point to get things to to happen. And again, once we start getting that ball rolling and we start developing momentum, that's when it gets fun. Joe: So we are in the age of so many, like self education, know so many programs and classes and courses and all of this stuff on the Internet, right. You can find it everywhere. So and you might even admit to this yourself, because based on what you just said about having a shelf full of tapes and all of this stuff, what would you say to the there are people out there that are professional seminar attendees right there, their professional course. So, Brian: We call them seminar junkies. Joe: Ok, so Brian: Yeah, Joe: We Brian: I've been there. Joe: Ok, so this is good because you're coming from the understanding that Brian: Oh, yeah. Joe: One more seminar, a one more class or one more course is not going to make the difference. It's that you have to start implementing what you've already learned and actually admit to yourself that you haven't done the work or this is the work you need to do and actually come up with a plan. Right. It's just like we hear it a million times. It's just so hard for people to understand, myself included. I'm not I'm not preaching from a soapbox here that, you know, you have to have a roadmap. Right. Because if you wanted to get hop in your car today and drive somewhere, you need to know where you're going. Right. You would get lost. Brian: Yes. Joe: It's no different Brian: Yes. Joe: With our life. Right. So what would you say to those people that are listening to that do continue to just think that that next breakthrough is around the corner by buying yet another course are going to some sort of seminar or conference? Brian: Put down the Kool-Aid because you have drunk the Kool-Aid, Joe: Right. Brian: What they're actually doing is they're pursuing the feeling, the positive feelings they get when they go to the seminar. They're enjoying that high and over time that wears off and they want to change the way they feel. They get frustrated and they go, oh, I want to feel better. Their subconscious then says, OK, well, how do we make ourselves feel? How we do that? Let's go to another seminar. I talk about this in the master class. That is, we get stuck on this learning loop and we go and we learn some information. We get all excited and we go try it and we fail. And usually when we fail once or twice, we quit. It gets hard. It gets uncomfortable. And we don't like to stay there. We don't like we don't we want to don't want to go through that process of learning how to do it and do it long enough to get good enough at it that we actually get to the other side of. OK, I got this. You know, it's like learning to ride a bike. You're going to fall and the only way to get better is to have somebody let go in and you fall down. You got to go through that process. You've got to learn to you have to make the mistakes. You have to, quote, fail, because, again, it depends on how you define the word failure, because at the end of the day, we get to choose what things mean. My definition of failure is different than most people's. My definition of failure is you only fail when you quit or give up. Joe: Hmm, agreed. Brian: Or you don't even try. Joe: Yeah, so it's almost better that if someone had that itch, they should stop for a moment and say, OK, let's do this, let's just try something completely different that we've never done before. Let's actually hire a coach and spend the same amount of money that we would have spent on a course. But we have a coach with us by our side for however many months or a year or whatever, however long that is. That same amount of money could be spread out to have someone keep you accountable and help you to come up with a plan and stay on track and implement all the ideas. Right. Brian: Absolutely. Joe: It would be worth a try for anybody who's one of these. You could Digicom junkies to seminar junkies. Brian: Yeah, the seminar junkies, Joe: Yeah, Brian: Yes. Joe: Right. So it would be a change? Brian: What's Joe: Of course Brian: The Joe: It would Brian: Right Joe: Be. Brian: If what's your outcome? What do you want? Why are you going to that seminar? And there were several times where people said, well, what are you what do you expect from this? What do you want to learn from this? And people are sitting there throwing out answers. And I would be sitting in the background going, I really don't know. I don't I don't have an answer for that. Joe: Mm hmm. Brian: And that was kind of the clue is like, wait a minute, why am I here? Because I want to learn. That's not good enough. I want you to know I started getting specifics is I want to learn how to do such and such and such, and I want to be able to, you know, be successful at doing that. And, you know, whether that was real estate investing or personal development becoming a coach, a lot of those things was, OK, how do you do it? Because, again, we're learning about doing and we learn through doing much more powerfully. There's a difference between head understanding and gut level understanding. And so, first off, a coach, if you haven't had a coach before. I'll share a good story with you, because this is how I got introduced to coaching was I actually bought the up sell of a seminar program that actually included six monthly coaching sessions with one of the coaches that's kind of designed to help you do it. And my experience was I actually got more done in those six months than I had in the previous five years. I did more stuff. I made more progress. And as I went back and analyzed the even deeper, I did more the week before that phone call that I had the previous three weeks combined because I knew I was going to have to get on the phone with him. And again, we're leveraging fear and that pain to our advantage. That's one of the reasons why I wrote my last book on Leisure Fear. One of the strategies that I teach is how to make your friend and how you make sure your friend, as you turn fear around, it's pulling you forward instead of holding you back. Brian: And one of the ways that we do that, as we make it more painful to stay where you are than where you want to go and having to get on the phone call with me or on the Zoom call with me. And we sit in there and says, OK, Joe, you said last week you were going to accomplish these three things. How how far did you get on number one, how far did you get on number two? How far did you get on number three? Now, I don't beat you up if you don't get them done. What I'm doing is I'm wanting to get under neath it and understand the root cause of what's holding you back, because when I when we're able to do that, you see hole that was fear of criticism. That's what prevented me from making those sales calls. I needed to make up for the fear of rejection or whatever it was. And we talk about that. And then we because again, we get to choose what things mean. And so what does it mean to make a cold call? Most people hate cold calls. What if you could turn things around to where you loved cold calls? Because, again, you get to choose what things mean. You can love cold calls. And so, again, it's basically going in there and playing in the mind and shifting away the what the beliefs are, because that's what it comes down to it. That's what our life is all about, is how we feel and what we believe. And when we understand that we do everything in life to change the way we feel. It's really interesting on where things go from there. Joe: Yeah, and I think either I think I read something from your website, I believe, but something you said, I think that's where it was, but it was something about the moment we actually tell the world what it is that we want to do. We're accountable for it. Right then we everyone that that was in earshot of that or reads it somewhere on our website that we're now responsible to do it. And that's why so many people don't actually put that out there, because then they're like, oh, crap, I actually have to do that now. I said it. Brian: Right, Joe: I told Brian: Yeah. Joe: Everyone I was going to do this. Brian: But you're right, it comes down to we are afraid to put ourselves out there Joe: Mm hmm. Brian: Because we're afraid of being criticized now, we do have different types of people in our lives. We have people that I refer to as Krabs, and they're usually in your left hand. For those people who haven't heard the story, I'm sure you have. Is it if you put a crab in a five gallon bucket without a lid on it, it'll crawl out right Joe: Mm hmm. Brian: Easily. But if you put two crabs into that five gallon bucket without a lid, they won't crawl out. The more actually, the more crabs that are in there, the less likelihood that the crab is going to get away, because as that crab, they're programming mental instinct programming that we have within us is that to stay part of the group to follow the herd. Joe: Mm hmm. Brian: And if somebody is trying to climb out, they're going away. And so the rest of the group will pull them back down. And if he continues to do that time and time again, they will actually kill him. Joe: Oh, I didn't know that part of the story. Brian: Yes, well, the same thing is true with other people in our lives. We have people that are on the same level that we are or below us and we're wanting to grow. Now, that doesn't mean that they have negative intentions. They're actually doing it for a positive reason because, one, they don't want you to leave them, but they also don't want to see you get hurt. This is where our family comes in. Parents say, oh, you just sit still, Johnny, because you're not ready for that yet, or they don't want you to go pursue this thing that they perceive as scary, risky, and you're likely to get hurt. And so they're going to try to talk you out of going in, pursuing your great dream. But then there's other people that, again, they're just going to knock you down, they're going to pull you down. And if you've ever listened to Lester Brown, he talks about that and his family, he'd show up for Thanksgiving. And his brother goes, Hey, Les, how's that seminar speaking gig going? And it was almost I'm getting there. I'm getting there. I'm getting there. But we also have people that want to support us and help us. And so it's who are you going to listen to and who are you going to spend time with? And so but it's also important to be in that group of people. Brian: Your support people are in your right hand, your crabs are in your left hand. It's important to know who the person you're across the table with and who you're talking with on the phone. Is this person a crab or is this a supporter and then interact with them appropriately? Because if you're talking with a crab, you stay in the shallow end. You don't talk about your dreams. You talk about the weather, you talk about sports, you talk about whatever that is dull and boring at the time and not really enlightening to us, but allows us to maintain the relationship because there's times in our life when, yes, we can eliminate some of those crabs because other times they're related to us and we can't get rid of them. And so what do you do? So in part of it is, one, you reduce the amount of time, and then two, you understand who you're having the conversation with and understand they're coming to you with a positive intent. They're trying to keep you safe. They're trying to they want you to be happy and they want you to stay well and they don't want you to get hurt. But the same thing is true with our subconscious, which is why our biggest enemy is right up here Joe: Yep. Brian: Is the robot that runs the show 80 to 90 percent of the time. And that's where I spend a lot of time, is helping people reprogram the robot, their subconscious, because unfortunately, it was a program with a lot of crappy code and trying to reprogram it is not as easy as copy, delete and then copy and paste. It's not that easy. It's like the biggest, ugliest ball of spaghetti you've ever seen and trying to figure out where that thing goes. And it's a mess. It's just a mess in there. And but we do have the ability to go in there and change it. And the more we actively pursue that and focus on that and pursue growth, the faster we can get to where we want to go. Joe: So we're going to talk about the services you offer, but you touched upon something that in a previous episode that I had put out, I got a lot of comments about it. And so I want to talk about it as it relates to you personally. And then we can talk about how you use it with your clients. But you spoke about journaling. And the more and more I hear, either I have guest on or I hear people talk about it, the more and more I feel like it's almost got the same benefits as when people talk about meditating, how you can quiet the mind. It was all this fufu stuff many years ago and now it's becoming more the norm. Right? It's something that you need that quiet time. So tell me more about what you think journaling does for people and the importance of journaling Brian: Ok, well, Joe: And Brian: Actually. Joe: Whether or not you actually do it nightly or daily or I'd be Brian: Yes, Joe: Interested to know. Brian: Yes, the the if you can see it there, it says, a life worth living as a life worth recording. And so, Tony, he's inspired me to consistently journal. I have journals from my first in fact, in my latest move, I was going through a lot of them. And I came across the journal that I had right after college. And I was actually really interested to go back and see the progress of my first sales job that I bombed out. I lasted like three months. My experience was the story I was telling myself was different than the story that I was reading. And so, one, it's a great way to document your journey in life. But the way that I teach people to journal No. One is it leverages the power of evaluated experience because you stop and think about it. You probably have heard that experience is the best teacher. Yes and no, because unless we learn the lessons from that experience, then it was pointless. If we keep repeating the same mistakes over and over again, we keep doing the same thing and expect different results. We're not learning. We're not growing. And so journaling is a great way for you to document your journey, but also to stop and evaluate what happened today. What did I get done? Because many times we get to the end of the week, we get to the end of the month. Man, I feel like I didn't get anything done. And you can go back to the daily journal process and go, oh, yeah, well, I did that and I did that and I did that and I did that. Brian: But it also allows you to say, OK, what am I actually getting done? And is what I'm getting done, moving me in the direction I want to go? Because, again, we've talked about the journey that we're on. We have a goal we want to achieve. And in order to get there, we like you said, we have to have a plan. Many people don't put together the plan. In fact, many go study programs. And I listen to rarely was there any planning process involved. And so I actually stepped somebody through this. Exactly. And the incredible results on what they challenge is Ugo's. We set our big yearly goal and we break that down into what are we going to accomplish in the next ninety one days and then we break that down. This is OK. What's going to be month one? What's going to be month two? What's going to be month three? And then we break that down. OK, what's going to be week one of month one. What's going to be in week two. Week three, week four. Because again, the only way to get to complete the ninety one day journey is to each day make forward progress. And how do you make sure you're making forward progress if you never look at the map and compare your results, what you're getting to see if you're moving in the right direction. Brian: It's like a airplane taking off from New York to L.A. without a GPS system, without a method for them to course. Correct. You know, there's a reason why there's a compass in the airplane. There's a reason why there's a GPS in there that's consistently every moment checking in and saying, am I on track? Am I on track and making those little minor adjustments along the way? Because if you actually look at a slight wiggle from L.A. to New York, because there's turbulence up there, there's wind currents up there, lots of different things depending on which way you're flying. Are you flying with the jet stream or against the jet stream? All of these things are impacting that flight. The same thing is true in our life. How do we make sure we are on target? And journalese is one of the ways to do that. But we also encourage people. The way that the journal is set up is to do that evaluation experience where you document what you got done, you documents your lessons along the way, and you also document the changes that you want to make, the adjustments that are going to make tomorrow a better day. How can I be better tomorrow? And then you plan tomorrow. One of the biggest challenges we have is making sure we get the right stuff done. How do you make sure you make time to get those important but not urgent activities into your schedule? Because if you do not intentionally plan them and schedule them into your calendar, rarely, very rarely are they going to actually happen, which means you're never going to really make the progress you want to make, because stop and think about it, your goals require a lot of time and energy doing those things that are important but not urgent, which is another reason why having the accountability is a big factor in that. Brian: It's like, OK, it's it's not urgent, but oh, my coach is going to be asking about it. What do we just do? We created the needed urgency. Give you a perfect example. I had one of my clients. She wanted to raise her rates and so she'd been talking about it for months. And so we were working on the programming in her head so that she felt like she was worthy of that price increase, putting it off and putting it off. And this is OK, put and says, OK, what's the plan? And so we specifically detailed walk through the plan. OK, I need to put a sign up on the door and I need to send out a notification of my. People and I got an email and, you know, here's an opportunity for people to come in and sign up for a plan where they can lock in the current pricing. And I says, OK, when I come see you next week, I want to see the sign on the door. When you think you put the sign on the door right after that call, Joe: Ten minutes Brian: 15 Joe: Before Brian: Minutes Joe: You showed Brian: Before Joe: Up. Brian: I 15 minutes before I walked in the door. Exactly. And it wouldn't have happened if I had not pushed her to make that commitment. As a mom, what are we going to do? Are we just going to keep going down this road? Because that's one of things that we do, is we look at it, says, OK, what happens if you don't change? If you keep doing the same thing you're doing today over and over again, you're going to get the same results. Are you happy with that? Are you satisfied with it? If you're not, then what are you going to do differently tomorrow? That's going to change. The trajectory that you're going internally is a big piece of that is to help make sure that you are documenting your journey and you're evaluating the experiences that you're getting and making sure that they're taking you in the direction you want to go and if it's not making those adjustments along the way. Joe: Is the majority of the time it happens is at night, just before you go to bed sort of thing. Brian: One of the things that we designed the system to be very flexible. There's actually a place for people to write in their schedule and there's no numbers on it because I've got clients. It's wake up at five o'clock in the morning and then there's guys like me who don't start their day until seven, but I'm usually up till midnight. So, again, it just comes down to fitting it into your system. And that's actually one of the things we do within the group coaching calls is we're saying, how do I take this system that Brian has created and apply it to my life? How does this fit into my life? And we teach people how to do that. And I've got one client who does restoration work. So he's very much like a firefighter. The phone rings and it's like the alarm bell going off. He's got to go fix somebody's problem. So how does he schedule his day? And so we came up with a system on how to use the system because what happens if the alarm doesn't go off? What are you going to do? So we had a plan, a system and a Plan B system Joe: Mm Brian: For Joe: Hmm. Brian: It. We recommend the Evening Times for a couple of reasons. Number one, when you're planning tomorrow, you don't have to remember it. Actually, you get a better night's sleep. Joe: I get it off your brain. Brian: Right, and so your brain, is it trying to remember all the things you've got to do tomorrow? We also encourage now I have some people completed at their end of their workday. So at four thirty, when they go home at 5:00, I've got one woman who does it at three thirty before she go pick up her kid at school at 4:00 and she's basically document what did I get done? And she's also there's still some things potentially that she's going to do because we incorporate not just your business, but your life in the journal. And so it's like, OK, what am I going to be doing for all 16 hours? And I'm awake and relax and let go because so many times we struggle with constantly running. And there's a reason why there's a pad of paper and a pen on my bedside is because there's a lot of times I wake up in this ideas and I got to sit there and I get to write it down because I will not remember when I wake up in the morning. And so it just comes down. We try to get the system to fit the person, not the person to fit the system Joe: Mm hmm. Brian: Like so many of them do. But at the end of the day, it comes down to what works for you. We recommend in the evening because of the benefits there. There are some people that do it first thing in the morning. If that's the case, as long as you're doing the system, great. Joe: I just hear about it all the time, and I said I was going to start it after the last episode, that someone who was heavily into it, I even publicly said, all right, I got to start doing it and I still haven't done it. Brian: Well, let's have a conversation about that, Joe, because, again, at the end of the day, it's what is it going to take to get you to move? Joe: Yeah. Brian: And that's actually something that because, again, I've got numerous stories that I can tell you about people that because one of the one of the most common mistakes that people make when they're doing the journal is the fact that they only do it Monday through Friday. They don't do it Saturday, Sunday, because, again, like the woman who does it at the end of the workday, my question to them is, OK, that's good. But what are you going to do, come on Saturday, Sunday when you're not going to the office? What are you going to do then? And so we create a plan on how and then we got to you got to figure out how to make it work. And so I actually challenged several of the people to do it, says, OK, if you don't in. The other thing is, is not getting the journal done. The night before it was OK. If you don't do the journal the night before, you have to spend two minutes on a cold shower in the morning. I don't know about you, but yes, they talk about cold showers being this great, wonderful thing. But I don't want that in the morning. No, thank you. And so, again, we move away from paying much better than the the perceived pleasure. OK, and so it's creating the pain. So it was like, OK, you don't do the journal, not before you're going to take a cold shower or I mean, really what I would do is I give them a choice. I says you can either a take the cold shower or B, you have to text me that says I didn't do my journal last night. Which one do you think people chose? And I said, OK, those are your two choices. You have to choose the greater pain. Which one do you think they chose as the greater pain? Joe: I would think having the texture would be more of the pain. Brian: Yes, Joe: Yeah. Brian: Because that is admitting Joe: Yeah, Brian: That they failed, Joe: Yeah. Brian: Which just goes to show you the level of programming we have around failure. And so, again, it's using fear and pain to move you in the direction you want to go. Joe: All right, a lot to unpack there. So we only have a little bit of time left and I want to honor your time. So let's do this first. Let's talk about I have for services written down that you offer. And you might have added one. You might have taken one away. But I have your one on one coaching. I have the ninety one day challenge. I have the mastermind and then I have your weekly accountability coaching. And so can you just briefly give us an explanation of those. And if I missed one at it and if you're not doing one of them, take it away. Brian: Ok, well, as a coach, I need I don't know where you are, so I don't know which service to offer you or which one is the right fit for you, Joe: Mm hmm. Brian: You or your listener. And so I really start with what I refer to as a discovery session where we sit down and talk about where you are and where you want to go. And then based upon that conversation, we determine how to best help you. Now, where do people usually start? But most people start with the incredible results, starting with their challenge, because it is the one skill that helps people take the action they know they need to be taking that will help them reach their goals. And they see tremendous immediate results, positive results and benefits from participating in the program. And it's one that it's only one hundred and ninety seven dollars if somebody wanted to participate in it. But you got to come through me and do that discovery session in order to determine whether or not that's the good right fit for you. The other thing that is like rocket boosters on the on any one day challenge is the weekly accountability coaching calls and the incredible results. And what a challenge. We do a group coaching call where we are sitting down and we are we're talking how to help use the system, how to get the system to work and fit into your life, and how to help you consistently take action on it. But we also help you with your plan on accomplishing your ninety one day goal. So if your goal is to get 50 new clients, this is OK. What are you doing this week that's going to make you more clients? And we're talking about those different activities in those different ideas and strategies. Brian: So the problem is, is there's anywhere from five to 15 people on that call, depending on how many people are actually in the group at one time. And so it comes down to how do you get enough of my time to where we can truly focus on that programming piece that we've talked about, which is such a big, ugly mess that gets in the way all the time. That is where that one on one time comes in to, where we actually spend 30 minutes specifically talking. We it's a very specifically designed program, says, OK, here's what I'm going to do. Here's what I got done. Here's what I learned. And here's the changes I'm going to make so we can review that in eight to ten minutes pretty quickly. And then we spend the next twenty minutes digging into what got in the way. What's the challenge and struggle you're dealing with right now? That's either the bitch that you're in, the roadblock you're facing, or what's holding you back from moving forward. And that right there is tremendously powerful and makes the ninety one day challenge much more successful. And people who are participating in both their results that they get in and I know they challenge is heads and shoulders above the people that are just in the program by itself. Joe: Yep, and I have to ask this, because I'm sure if I was listening to this, it would be driving me nuts the entire time. It's like, why ninety one days? It's not 60, 30, 90, 120. Brian: It's seven times 13 is 91, seven days for 13 weeks. Joe: Steamworks got it. Brian: So because, again, one quarter is three months, which is four point three weeks, and so it's to get a full 13 weeks is ninety one days. Joe: Perfect. So we covered that and the Brian: Ok, Joe: Weekly accountability and then Brian: Right. Joe: The one on one coaching is. Brian: The one on one coaching I refer to I refer to as my general coaching, and that's where somebody is really wanting to grow and make changes. And a lot of times people will start off there. And again, they're wanting to do a lot of growth and unpacking and deal with the programming issues that are going on. And they're wanting to make some significant changes. Those are one hour sessions and those are usually each week as well where we're digging in and we're trying to figure out again, we're making some serious shifts in there. And then a lot of times it's like, OK, we got them straightened out and we got them on a path. We've created the plan. We've got the momentum going now and it's starting to move forward. And a lot of those people will roll into the accountability coaching so that they have the regular check ins that are getting done what they want to get done, but they don't need to necessarily. OK, let's dive in deep in there and start digging around. Those are wonderful sections. I love doing them, but they take a lot of energy on both myself as well as the person because we're going deep. Know, one of the things that you probably have learned by now listen to this is I don't like to play in the shallow end. I like to dive deep and I like to go under the covers. And if people aren't, that's the other thing is if you've got to be comfortable in playing in the deep end and there's a lot of times when my role as a coach is not to tell somebody what to do, I almost never do that because who's an expert on Joe and Joe's business, Joe is right. So my role is to ask you the questions that is going to help you come up with the answers and solutions to the problems that you're faced with that external perspective and to help you come up with the solution that is within yourself and that the mastermind is more Joe: That's Brian: At the upper Joe: Ok. Brian: Level Joe: Ok. Brian: And that right now is closed. So people are not available into that. And usually what happens is we start people off in the 90s when they challenge and there's those people are rolling up into that mastermind as they complete the 91 day challenge. Joe: Scott. Brian: But we start people off with where they are and what they can afford of what they need to do. And so we have programs that start, like I said, at one hundred dollars a month, up to twenty five to five thousand dollars a month, depending upon which program you're involved with. And there are other things that I do. I have mentioned Tony Robbins, but I have not mentioned John Maxwell, most certified coach, trainer and speaker of the John Maxwell team, which means for those people who are not familiar with John Maxwell, he's a world renowned leadership expert. And that was one of the big challenges that I saw was there was a lack of quality leadership in our world today. And because my target market is that small business owner, entrepreneur and professional, they have never really had much experience with leadership training. But again, I'm not a leadership trainer. I'm a leadership developer. And so we have leadership programs using John's world class material that over a period of 90 days, we teach you the strategies and you practice them for ninety one days so that you develop those skill sets along the way. And so, again, it depends upon where you are and what you need and what tool is necessary to help you fix the problem that you're up against. Because again, I use Stephen Covey, I use Joe Mitali. I will pick from anybody I need to and I will claim that everything that I share didn't originate with me. Brian: I'm standing on the shoulders of the giants that went before me as far as you know, all the way back to the Greeks, Aristotle and and some of those, because they had it first. They they mentioned it. And again, everybody since then is really just repackaging it from there. And if somebody wants to do a DIY version of it, pick a great book. Napoleon Hill's was probably the the godfather of personal development or at least modern person development with they can grow rich. And one of my mentors actually went and read the book and studied it over and over and over again. You probably have heard the suggestion that you should go read a book a week or so, go read 50 bucks a year. Right. I challenge you. That's not the right strategy if you're wanting to grow. It's a great way to learn information. But if you're wanting to make changes in your life. Yeah, one great book and read it 50 times, study it, do the exercises at the end of the chapter, implement the strategies. Another great one is Stephen Covey's Seven Habits of Highly Effective People. That that book still to date. That's one book I try to read at least once a year. And I'm usually listening to it because I'm taking advantage of the windshield time that I have. And it seems like there's always something more in there. Brian: That book is so deep and there's so many different levels that you can get into it as you grow. There's another level. There's another level. There's another level, which is how I spend a lot of my time. Yes, I have three different coaches and I'm constantly consuming more and more material. But there are there's about ten different books that I try to spend time reading consistently because they're the road maps, they're the foundational skills. And it's going to take for me to get to where I want to go. And it's only through consistently coming back to it. You don't become a master blackbelt by learning how to do the form and doing it perfectly. One time I believe it was Berklee that said, I don't fear the man that knows ten thousand ticks. I fear the man that is practiced one kick ten thousand times in the story that got you the story and the rest of the story was the example of that was he says will show me. And and basically what it was is because that person had practice that kicks so well. It doesn't matter if even if you know it's coming, you can't block it, you can't stop it. He has mastered how to do it regardless of what you do to counteract that. The only way to not get kicked is to not get into the fight. Joe: So. We're over a little bit, we have a few more minutes. Brian: Oh, yeah, I'm good. Joe: Ok, cool. So I want to ask you about because you mentioned since we're on the subject of books and you mentioned Joe Vitale and you were you are part of a book called The Abundance Factor. Brian: Yep. Joe: Can you tell me a little bit about that and how that came about and. Brian: Well, I was on the short list as Joe was looking to write his next compilation book, and I had been following him, been a fan of him, read a number of his books. I still practice one of one of the big things that sticks for me from Joe is the story of Hopital Pono. If you have not read the book Zero Factor, I highly recommend it. It's a very fascinating book. The mantra that that book teaches is something that actually helps me go to sleep at night because my brain has a hard time shutting down. And by saying that for phrase mantra helps my it's kind of a signal to my brain to stop thinking and go from into my head and into my body. And so it's really helpful there. And so I was on the short list of authors that Joe asked to help participate in that book. It's called The Abundance Factor. I knew the group of people that were pulling together. And so my chapter is called The Unpleasant Truth, because, again, there's a lot of people out there teaching because we're talking about the mindset of abundance, which is something that a lot of people struggle with. But it's hard for people to actually do it and practice it consistently. And that's really what my chapter was about. It was about taking the actions that the book is encouraging you to take. And so that's what my chapter is in that book. April of the year that it came out, we did hit the Amazon bestseller list with that book at the time. And it's been a great book. And I use it more of a as a calling card and as an introduction to myself when I'm meeting new people. Joe: And then you mentioned earlier about a book that you wrote that I did not actually see in my notes. So can you tell me about that? Right. Was Brian: Ok, Joe: There. Brian: I've written three books. Joe: Ok. Brian: The first book is called Ready, Set Succeed, which is a self published book. Again, it was another compilation with a series of different authors. And I've got several boxes of those still today that, again, I use them as is handouts. And it's, again, about taking action because again, that's what I saw people struggle with and implementation because again, at the end of the day, it's ready, set, succeed, go. You've got to get moving. And so we were all writing the chapter based upon that. It was a self published book. The only way that you can get that is to go through me to get that I'm aware of. And I actually did have a client come to me through that book for one of the other offers. They got it. They called me up and that chapter resonated with them. And it was an opportunity for me to help them out. Then we wrote The Abundance Factor, and then after that we wrote a book called Unleash Your Fear. And that book is available right now. You can go to unleash your fear dot com and get a copy of that. Right now, at this point in time, it is about a 40 page e-book. You can get a copy were actually read it to you for in about an hour. Brian: But that's one of our projects for the rest of this year, is to work on rewriting that book and expanding it to where it's around a hundred pages and we turn it into a physical book and using that as a methodology to share that message. Because as we've gone back and we've we've shared that message, we teach in a very powerful concept in that book about the relationship that people have with fear, because right now most people have a lousy relationship with fear. But fear is just a tool that's used by our subconscious. And our subconscious causes us problems because it's designed not to make us happy. It's not designed to make us successful. It's designed to make us survive. Problem is, when we do go out there, when we want to grow, when we want to succeed and we want more, it sees that as not surviving. That's risky. There's pain out there if we pursue those things. So how do we how do we change that? How do we work on that? That's what I've understood from the people that have read the book, that a lot of people enjoyed it and you can actually still get it for free for a little bit longer. Brian: We're in the process of getting that changed. You can go to unleash your fear Dotcom and get a copy of that book there. And once we get the expanded version, we will still be using that. You are all along the way. And so in this process, we've got a lot of great tools that are available to you. And we've talked about a lot. Joe, you're actually one of the longer podcasts that I've gone on and we've talked about a lot of different things. But one thing we haven't talked about is one of the foundations that I used for my coaching, which I refer to as the Five Keys of Success. And that's actually a podcast that I do called the Five Keys of Success podcast. And you can go out there to wherever you get your podcasts and Google five Keys successor Brian Lovegrove, and you'll be able to find it. And I talk about those five keys, because at the end of the day, because, again, I've been doing personal development for decades now. And so I boiled down all of that stuff to what is the true fundamental foundational skills and tools you need. And I came up with those five keys. You want to know what those five keys Joe: I Brian: Are? Joe: Do, I have actually you were not going to get off this podcast without talking about it, so I have them here. I still have other stuff. That's why I like that. Yes. So please, I totally want to these this is like one of the things that really triggered it. When I wanted to have you on as a guest, I'm like, man, I want to know what those are. Brian: Well, the five keys of success, the first key is clarity, and I refer to it as get clear because without clarity, you're lost, you're wandering around in a fog. If you don't have a destination, you're never going to be able to get there. And if you don't know where you are, how do you know how you're going to go from where you are to where you want to go? And we talked about the plan. If you are not clear on the plan on how to achieve your goal, you're not going to get there now. But there's some also challenges with that piece because, again, a lot of people may not necessarily know how to get to that point, but do you know how to get started? Because that's the key. Do you know what the next step is? How many people get bogged down with steps? Nine hundred and eighty seven through steps. Twelve hundred and eighty four. Well, what steps do you want? I'm on step five. What step six. I don't know. Focus on step six, seven, eight, nine. OK, focus on what's in front of you and these other steps you will figure out by the time you get to that point. The second key is commitment because without commitment we cave in to the fear. We don't have the motivation, the energy and the power to keep going when things get. And the analogy that I love to use is the story about Cortez. When he landed in The New World, he burned his boats. His men woke up the next morning and they went in. He addresses many gentlemen. There is no way home that we do not create for ourselves. And so his small band took on and conquered much larger nations and groups of people in South America because they were committed to making it happen because it was either do or die. Joe: I'm a big fan of burning the boats, by the way. Brian: Absolutely, that's one of the podcasts that we did, is, OK, how do you burn the boats? Joe: Yeah. Brian: And we kind of walk through that exercise and that's that can be a whole coaching process. My story around that was I used to weigh two hundred and sixty pounds and I went on a diet and I lost thirty five pounds in the first month and a half. It was a radical diet. And one of the things that I did on the back deck in the fire pit is I burn my fat jeans and I actually have a picture of you. It's it's at night. You can all you can really see the flames. You can barely make out the jeans as part of the picture. But I vividly remember that process. And I promised myself I would never buy that size pair of clothes ever again. Now, have I been able to keep off all the weight that I lost? No. But when my pants get tight, that option is not there. Joe: Yeah. Brian: It's like, OK, we got to do something, we got to turn this around because we are not buying a bigger sized pair of pants. And so, again, that's where that burning the boats actually comes in, which leads us to step three, which is get crankin or get busy taking action. Money talks about taking massive action. And, you know, how many times have I you know, I've tried everything. Really? How many times have you tried? What have you tried? A hundred things.

I had the honor to interview Brian Bogert who for me, is a real life superhero in a sense. He has dealt with his share of adversity and he continues to brush himself off while continuing to bust through barriers to create his best self. I admire all that he has accomplished in his life and he's here to help other accomplish the same and more. He goal to impact over a billion people is lofty yet if there is anyone who can do, I'm putting my money on Brian. This was a special episode as Brian was so gracious and share so much and sometimes the conversation gave me a lump in my throat as we went deep. I sure hope you enjoy this episode as much as I did creating it with Brian. Thanks for listening! Much love, Joe Brian Bogert: Human Behavior and Performance Coach, Keynote Speaker, YouTuber, Podcaster and Course Creator Founder - Brian Bogert Companies Website: https://brianbogert.com/ No Limits: https://brianbogert.com/no-limits/ Instagram: https://www.instagram.com/bogertbrian/ Facebook: https://www.facebook.com/bogertbrian YouTube: https://www.youtube.com/channel/UCmhaMgY8q-tMMCj0rpGg7iw LinkedIn: https://www.linkedin.com/company/the-brian-bogert-companies/ Email: info@brianbogert.com Podcast Music By: Andy Galore, Album: "Out and About", Song: "Chicken & Scotch" 2014 Andy's Links: http://andygalore.com/ https://www.facebook.com/andygalorebass If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. For show notes and past guests, please visit: https://joecostelloglobal.libsyn.com Subscribe, Rate & Review: I would love if you could subscribe to the podcast and leave an honest rating & review. This will encourage other people to listen and allow us to grow as a community. The bigger we get as a community, the bigger the impact we can have on the world. Sign up for Joe's email newsletter at: https://joecostelloglobal.com/#signup For transcripts of episodes, go to: https://joecostelloglobal.lybsyn.com Follow Joe: https://linktr.ee/joecostello Transcript Joe: Ok, today, I want to welcome my guests, Mr. Brian Boger. Brian, welcome.   Brian: What's up, Joe, I love I love that shirt you're rockin no limits, soldier, right there. I   Joe: Hey,   Brian: Love it.   Joe: There you go. You know what? So since we're talking about the shirt, we've brought it up. Explain to me the purpose behind this shirt. I know that you give all the money away to   Brian: One hundred   Joe: Charity.   Brian: Percent of the proceeds, huh? Yeah, so I'll first describe kind of what no limits is just high level and then we'll talk about kind of where this is. No limits is is part of our branding. And it's this belief that I genuinely feel like we all can live with no limits. It's not that we're unlimited and we can do anything we want. It's that we can live significantly beyond the limits we place on ourselves and certainly be on the way the world has placed limits on us. And so that infinity sign, there's a lot of intentionality around it, which is really about awareness and intentionality and how those weave together to help us find who we are so we can live with no limits with our life in alignment. And so as we've been building this brand, there's always been this altruistic philanthropic side of me. Everything I do and desire for me to be financially successful is also for my ability to distribute that wealth back out into the community. So when we had an opportunity that people started to really attach to the brand and what they were doing were like, you know what, let's make some apparel. And we've got, I think, five different t shirt designs, both in men and women. We actually also have a dog design, too. I'll explain that in a second.   Brian: But the reason we did it is one hundred percent just to allow people to attach to it. You see, there's not Brian Bogot companies and stuff written all over it. Right? It's really the infinity in no limits and embedding people in that. And one hundred percent of the proceeds are going to nonprofits that we're going to rotate on a quarterly basis. And so, you know, it's just another cool way. You know, I'm not gonna make a bunch of money off t shirts. That wasn't something that needed to move the needle. But, you know, people can attach to the brand and feel like they're doing something better. Their investments also helping more lives. And a big part of who I am, I'm on a mission to impact a billion lives by twenty, forty five. This is just another way to perpetuate that. The dog shirts are that we're an animal family and my wife is like obsessed with them. And she's like, we can't have apparel without matching dog apparel, which just saw me die laughing because I still think it's so ridiculous. But I love my wife to death and every time my animals wear clothing, it just makes me laugh. But it's been cool because, yeah, those are those who go to support our local Humane Society and ASPCA as well. So some of the proceeds.   Joe: That's great. Yeah, and it's a beautiful shirt. I'm always nervous about when you can't you can't feel it first, but when I took it out, I was like, I don't know. I've been in the gym a lot lately. I might be a little a little too big for him. It's like fit perfect. It makes me actually look better than I should look. So I   Brian: Well,   Joe: Appreciate   Brian: You know,   Joe: It.   Brian: I'm super anal about t shirts as well, so I'm actually happy that he said that because I before we ever posted them, before we started selling them, we actually tested a bunch of shirts. And I wanted to make sure that they fit and they felt like I like shirts to fit. Not that that means everybody else needs to like what I like. But I've had so many other t shirts and different apparel that they just don't fit right in. You never wear it. And I'm like, if I if I'm going to buy something for my own brand or have something for somebody else, I want something that people feel comfortable in.   Joe: Yeah,   Brian: So   Joe: Yeah,   Brian: I'm   Joe: So   Brian: Happy that you feel that way.   Joe: Yeah, and besides wearing it out like normal, like this with her jeans and whatever, I definitely am going to get some more because I think it's cool and it'll be a gym shirt for me. And then I think people will come to me and go, that's cool, what is that? And then send more people your way. So that's my goal.   Brian: I'm so grateful, yeah, for the gym one, you're going to get one of those embrace pain to avoid suffering shirts. That's   Joe: There you go. That's   Brian: That's   Joe: Right,   Brian: That's that's the motto in the gym that's   Joe: That's   Brian: Going to help push you, man.   Joe: Right. All right, deal. So I always I know you've told your story a zillion times, I'm sure. And I want you to tell as much or as little as you want to bring us up to today. So however, you can kind of let the audience   Brian: All   Joe: Know. Yeah.   Brian: Hold it a million times, so I feel like I know the points I want to hit, so I'll just I'll just run with it. I'm going to ask you and anybody who's listening, unless they're driving to just close your eyes for just one second. And I want you to imagine going to a store, having a successful shopping trip, heading back out to your car. And it's a beautiful day. And you think you're just going on with the rest of your life like it was just any other normal shopping trip. And then you get to your car and you turn your head and you see a truck barreling 40 miles an hour right at you with no time to react. Go and open your eyes. That's where this portion of my story begins. My mom, my brother and I went to our local Wal-Mart to get a one inch paint brush. And anybody who's known me followed me or even in the few minutes we've been talking can probably tell. I've always had a lot of energy. It's the first one of the car and not a surprise to my mom because I want to get home and put that paint brush to use. You know, this is back in the days, though, before they had key fobs. So I had to literally wait for my mom and brother to close the gap of those four or five feet, catch up, stick the key in the door and unlock it to get on the other way.   Brian: And as it happened, the truck pulls up in front of the store and a driver, a middle passenger, get out. And the passenger all the way to the right felt the truck moving backwards. So he did what any one of us would do, Joe, and he screwed up and put his foot on the brake instead of the gas combination of shock and forced Zoom up onto the steering wheel, up onto the dashboard. And before you know it, he's catapulting across the parking lot 40 miles an hour right at us with no time to react. Now, we were in that spot, so we went up into the median, went up to the car in the median, ultimately knocked me to the ground, ran over me diagonally, tore my spleen, left the tire tracks, scar on my stomach and continued on to completely sever my left arm from my body. So there I am laying on the parking lot on one hundred and fifty three day in Phoenix, Arizona, my mom and brother just watched the whole thing happen and they look up and they see my arm 10 feet away. Fortunately for me, so did my guardian angel. She saw the whole thing take place, she was a nurse that walked out of the store right when this happened.   Brian: She saw the literal life and limb scenario in front of her and she rushed immediately into action. She focused on life. First, she came over and stopped the bleeding and she saved my life. And then she instructed some innocent bystanders to run inside, grab a cooler filled with ice and get my detached limb on ice within minutes. Had she not done one or both of those things, I either wouldn't be here with you today or I'd be here with you today with the cleaned up stop. That's just the facts, right? So I will expedite a whole lot of the rest of that particular story. We can dig deeper if you want to. But as you can imagine, there was years of recovery that came from this. Twenty four surgeries and a whole lot of lessons and observations. What I've definitely learned is that I have an extremely unique story. I'm sure that your listeners weren't expecting it to go there today. But what I've also realized is that we actually all have unique stories. And what's important is that we pause and become aware of the lessons we can extract from those stories and then become intentional. How do we apply to our lives? And we all have the ability to do that. We also all have the ability to tap into the collective wisdom of other people's stories, to shorten our own curve, to learn something to share with you two primary ones.   Brian: And then we'll just see where the conversation goes. The first is I learned not to get stuck by what has happened to me, but instead get moved by what I can do with it, and the second I didn't realize until far later. I was a kid. I was seven, eight, nine, 10, 11, 12 years old when I was going through the meat of all of this. Yes, I was the one doing the the therapy. Yes, I was the one having the surgeries done to me. But I was also being guided through the process. So I was a little bit in a fog. My parents, however, were not they were intimately aware of the unceasing medical treatments, years of therapy and the idea of seeing their son grow up without the use of his left arm was a source of great potential suffering for them. So they willed themselves day in and day out to do what was necessary. It was tough to embrace the pains required to ultimately strengthen and heal me. So whether it was intentional or not, what they did was they ingrained in me a philosophy and a way of living which I embody and everything I do now, which was to embrace pain, to avoid suffering. And I believe when that's done right, that's also where we gain freedom.   Brian: So it's these concepts that I use to not only become this unique injury, but how my business partners and I scaled our last business to 15 million with the span of a decade. And now how is a human behavior performance coach and entrepreneur? I flip that on its head. You will have individuals and organizations just like you, just like the people listening, become more aware, more intentional, and who they already are, their most authentic selves. You see, I believe that's when magic starts to happen and the door starts to crack to perspective, motivation and direction. And that's when people have the opportunity to have joy, freedom and fulfillment and to back into their lives. And those are the reasons I'm spending the next twenty five years of my life committed to trying to impact a billion lives on this planet. Because if we can reduce the level of suffering that people experience, which there's a lot, and we give them the chance to experience joy, freedom and resentment, we give them the permission to be exactly who they are and know the world will embrace them and love them for exactly who they are. And we can bring vulnerability and authenticity into everything we do, which are the glue that binds human connection. Then we can come together and leave this world a lot more. Beautiful place for my kids, my grandkids.   Joe: Well, let me start here first. Do you still are you still in contact with that nurse?   Brian: You know, I am actually on a mission to find her right now. I've never spoken with her. And so part of the reason I also talk about that role in that process on so many platforms is I want there to be a lot of exposure and hopefully the world is going to help me track her down because I just want to say thank you.   Joe: Sure, that time that I've heard the story, it was like, I need to ask him that question, I'm just wondering if they're in connection with each other.   Brian: We're not I'm actively looking for her right now.   Joe: Got it during the time you were going to school. How did you handle I would assume you were treated differently, right,   Brian: Of   Joe: By   Brian: Course.   Joe: Your by your friends and teachers and they always whatever the case might be. How did you handle that?   Brian: Yes, so I think I handled it from a place to survive and protect myself, although I didn't realize that's what I was doing until far later. I didn't I didn't like being the center of attention and I didn't like. Being defined. By boundaries that were placed upon other people's view of what they'd be capable of in my scenario, and so I got this really adamant approach to I'm not going to be defined by those boundaries and I'm going to break beyond boundaries for my entire life, because why not? If I want to do something, the limitation is inside. Right. I need it. And there may be a physical limitation in some ways, but like I can always overcome the physical limitation. If I have a will and desire, that's great enough. But what happened right to protect myself is I created this intellectual narrative, which was I'm good, I'm strong, I'm capable. I don't need anybody's help. And it served me really well for a long time during that period of time, I was able to really hone my emotional intelligence because I got so good at wanting to divert attention from me that I got very strong in my ability to read people, read environments, read situations so that I could almost ensure that that attention wasn't on me. And so it honed those skill sets. And it also honed my mental toughness, which, again, I'm a huge believer is a big part of the equation to be kind of successful. That intellectual narrative ended up biting me later in life. And when I was 20 years old, I broke my arm in a snowboarding injury.   Brian: Compound fracture almost lost it again. And that was the moment that I realized the power of our narratives because the world bought into mine. I had I had sung that preached that narrative so strong. I never even said those words right. That's just the message that I was sending with my energy and how I showed up and how I interacted. And now all of a sudden, I'm in my most vulnerable period ever as an adult, not having the same infrastructure and support system that I had at home that I probably took for granted up until that point, how much support I had. Now, sitting in this vulnerable position, I didn't have the courage to ask for help. So I had a lot of friends, a lot of family. Nobody showed up and they didn't show because they didn't love me or didn't care about me. And they showed up because they just believe Brian's goody strong is capable. He doesn't need anybody else. And so that's kind of the during that whole school adolescent period. Right. It was really about me proving that I could overcome the physical limitations, that I could protect myself, that I could get myself there. But what I really downplayed the importance of was the importance of human connection. So that whole next year of my life, I shifted to vulnerability and authenticity and how do I hone the relationships that I was developing so strongly through emotional intelligence to be able to focus on a true connection.   Joe: So it sounds like your parents were super special. Did they go out of their way and whatever normal way for them to handle it, to not limit you from doing anything like when somebody knocked on your door and said, hey, can Brian come out and play and we're going to play football? Did they say, Brian, go have fun? Like, is   Brian: Yeah.   Joe: That the approach they took?   Brian: You know, nobody's ever asked me that question, you just gave me chills when you asked that. I think it's a blend, honestly. They did. They never wanted to be the reason that I didn't do something. But as you would expect, all parents have a protection mechanism that kicks in. So immediately after the accident, I was I was in slings and during surgeries for a few years. And so that first year after the accident, no, I wasn't going out and playing at the level that I would have right between seven and eight. But it wasn't long after that that it was it opened up. We started having good friends in the neighborhood. We played football in the street. We played basketball on the street. We rode bikes nonstop. And so they were never going to tell me that I couldn't do those things. Now, what they didn't want me to do, they didn't want me to join a football team where we were playing tackle because for obvious reasons, I get hit really hard on that arm. Even though the doctor said the bone wasn't strong, we don't know. Right. So so they would limit it in terms of like, exactly the application. But at the same time, they got so used to me doing what I was doing that whenever the phone rang and it was somebody a number that my mom didn't know back then, she was expecting insert branded something again because I needed I think they appreciated the fact that that's who I was when I was born.   Brian: I mean, I was always the guy that was pushing the limits even before this. This gave me perspective in humility that I wouldn't have had otherwise. And so they at least were aware enough to recognize, like Brian's got a higher risk threshold and probably has an even higher one after the accident than he would have had anyway. And they they knew that they needed to give me those outlets to be able to spread my wings and be free. So they always encouraged. Right. Like, if I wanted to go mountain bike and do jumps, they'd be like, OK, you're going to get hurt. And then if I got hurt, we'd figure it out. Right? I mean, within reason, they gave me the freedom. I think they made the right decision to not let me play tackle football. Who knows what could have happened, but did I play on other sports teams? Absolutely. So, yeah, I think my parents really did encourage and they still do to this day, despite the fact that they know you know, I think my mom has just gotten used to constantly being on edge, like expecting that Brian is going to do something crazy and get hurt. That's how we find our limits in this world, is we've got to push them.   Joe: Well, tell her to not follow your Instagram account so she doesn't have to see you squatting. Four hundred pounds. I saw that. I saw the photo of you sitting there. I'm like, oh, my gosh, I can't watch this. This is killing me.   Brian: Well, I mean, and that's one of those things I had to learn, right? I mean, my biggest limitation for some of those things is my hand strength. And so I have to get creative and I figure out how to do things. And when I first started deadlifting, I mean, I knew I couldn't deadlift with a normal bar because of the imbalance in my body already, but I could deadlift with a bar and protect myself for the most part. Well, that worked really well until the one time that my strap broke   Joe: Oh.   Brian: While I was lifting. And this was like early on. So I had to, like, learn these things. Well, my instinct wasn't to just let go of the bar on the other side. And I think so what you saw the other day, I wasn't 400 pounds. I think it was two hundred and   Joe: Yeah,   Brian: Forty.   Joe: I know, I just I couldn't remember,   Brian: But   Joe: But.   Brian: But I but I have I have reps significantly above 300 pounds. I don't say that to impress. I rest to the point I was doing that in this one scenario when the strap broke and I didn't let go on my right hand because it wasn't instinct, because I wasn't expecting the strap to break. And this was a learning experience because it tweaked me really bad. And I mean, I didn't deadlift for a few months after that. I had to recover. But once I started getting back into it, it changed my form. It changed my focus, it changed my attention. And now I'm like intimately aware of, like every movement on the strap. And I'm like ready at any moment to just drop so that I don't tweak my back. But my core strength is a big part of my ability to not be in debilitating pain every single day. Those deadlifts keeping my upper thoracic, keeping my shoulders, keeping my back because I don't have a lot on the left side of my back, keeping them strong is essential for me to not be literally in debilitating pain every day.   Brian: And so those are the those are the pains I have to embrace. I've got to embrace the pain of figuring out how do I lift in a way that pushes my body, gets the hip hinge in there, gets the movement, my back and my core strength and all that stuff engaged in a way that's going to allow me to maintain a livable amount of pain in my back because the imbalance versus debilitating suffering. So it's funny that you mention that. But yeah, I think my mom is just used to it. My wife is too. I mean, my wife is incredible. She literally is like I know that if you set your mind to something, you're just going to go do it. And there's a high degree. At some point you going to get hurt. She's like, but what am I going to, like, box you in and continue? Like, you're just going to go do it anyway. I was like, yeah, see, like, I love that, right? It's like just let people let people spread their wings.   Joe: That's right. Well, that's great before we get off of this subject and move on. I know that you and Blake do mountain biking,   Brian: Yeah, we do,   Joe: Right?   Brian: Yeah.   Joe: And that's like a big thing he loves to do with you and you with him. And so that's got to be at least I mean, I've done it and that's a lot on the arms.   Brian: Yes, so what's funny is I have no other perspective because I didn't learn how to mountain bike until after my injury, I didn't I didn't learn how to mountain bike when my when my son did at five and six and seven. So, yeah. It isn't in balance. Yeah, it is difficult. And I did it for almost. Let's see, I did it for probably 20 years before I actually started adapting my bike. And so there's no tricep, so Tricep and Laerte are the two muscles that you absorb, all of it, all of the impact with when you're mountain biking outside of the suspension. So I don't have a lot of tricep. So there's an automatic imbalance in my body, but I've learned how to balance it because I didn't know any other way and I was motivated and wanted to do it. Mountain biking is one of the few places that I'm absolutely free. And the reason I'm absolutely free there is I don't have the ability to think about anything else. Almost any other workout I do, almost anything I do like there's time to think. Mountain biking, you've done it right. You know, like you've got to be on your game.   Brian: One hundred percent focused on what's ahead of you. And so because of that, I've learned how to how to modify my body, my weight distribution, the way that I actually handle the handlebars. But two years ago about I started researching modifications for people with upper extremity injuries. And I landed with this company in the UK that they're actually right now building a product for me that I think is going to take my mountain biking to the next level, which is cool. But what I did is I got a steering stabilizer almost like the ones they have on their bikes. There's a company in the US called Hoby and they make these steering stabilizers for for mountain bikes. So I ended up getting that which what it essentially does is it's a spring unit which snaps the bars back to being straight. I thought it was going to help me more going downhill than uphill. What's crazy is it's actually helped my climbing more than anything because I can pick a line and put all the power I need to in the pedals and not worry about the imbalance in the handles, because it'll it'll keep my lane pure   Joe: Yeah.   Brian: And with slight, rigid and then downhill. It just gives me more confidence as well, because if I were to hit a bump and it goes on the left side, your weight goes forward, the handlebars collapse. Right. And just like twist the bars, this steering stabilizer stabilizer allows me to balance it with the muscle structure having the right arm and how I can balance my body on the left and then hope, hope he breaks is also another brand that I actually found out they just released this last year, a brake unit that has two master cylinders in one unit so you can have your front and your rear brake both on the same side. I've always never used the front brake in mountain biking   Joe: Sure,   Brian: Because my right   Joe: All that   Brian: Side   Joe: Pressure.   Brian: Is always   Joe: Yes.   Brian: What you want to be able to use primarily anyway, right? Whereas road biking, which I do a lot of the front brake is more important. Mountain biking, the rear one's more important. So I was always able to get around the corners, but I never had the confidence that I could actually stop and modulate my brakes effectively. So I would take things a little more cautiously now that I have these brakes on both sides and I can truly modulate, like just with, like little twitches in my fingers and the steering stabilizer and it's changed my mountain biking game. I can go out there and rip at a level that I've never been able to with confidence. And then there's like I said, these are these two other products that I'm really excited about. But, you know, one of the things I never knew any different, I wanted to do it and I figured it out. And I think that, again, that's one of those things that I could have just told myself, like, nope, you can't do it. You don't have tricep, you don't have a lot. But I genuinely believe if you want something badly enough and you take the time to think, plan and put things into trial and error, you start to realize you can do a lot more than what the world conditions us to believe we're capable of. Mountain biking is just another example for me on many things that I've been able to break those boundaries and expectations. I see I go mountain biking. People are like, how do you do it? I'm like, how do you do it? I mean, you could you could explain to me with a fully abled body how you do it, but I wouldn't understand because that's not my experience.   Joe: Yeah, that's crazy. So, Blake, is your son Addisons, your beautiful redheaded little daughter? With what happened to you, do you believe that certain people on this earth are have the power to get through some of these things where I just think about what you've gone through? I think about even my own brother, who, when he was young, why they were there at my parents house, they were splitting wood with one of those hydraulic splitters. That goes really slow. Right. But the   Brian: Oh,   Joe: Log   Brian: Yeah.   Joe: Slipped and he had like these two fingers crushed   Brian: Yeah,   Joe: And   Brian: Yeah.   Joe: Then, you know, reconstructed but not usable in a sense. Then he lost his son at 21 years old in a car accident. And I think about this and I go, God, I. I am not I don't have the capacity to handle something like that. And I guess when it happens, it's different. Right? You figure it out. But I almost feel like certain people I don't know if they just they're born to be able to handle these things. And if this is more for the audience   Brian: Yeah.   Joe: That might hear this and go, oh, God, there's all of these things that come into people's lives that they're they're given to deal with whatever that might be. And is it just the chosen ones that can handle it? That's why they've it just doesn't make any sense to me. So that's.   Brian: Yeah, so. I really appreciate the direction your questions are going. By the way, I just have to compliment you on that. You're asking a depth of questions that don't often get contemplated. And I think that there's a lot of truth behind even what you said. You know, it's interesting if you even think about what you just said when you were talking about your brother, you say, I look at him and I'm not sure that I could have handled it. And the reason I pay attention to that is because that is what I truly believe in, how the world has viewed me, they have viewed my limits through their own lens of what they believe they're capable of. I don't think that people truly know what they're capable of until they're tested. And that can be done either intentionally or externally, right? Sometimes we get tested not by our choice. Clearly getting run over by a truck was not by my choice, but it was a test. And I could show my strength to myself into the world by how I stood back up and what I've now done with it. Why I say I have a unique story is it doesn't matter the trauma that I experienced because it's unique solely to me. The trauma that your brother experienced, the trauma that other people experience with divorce or loss of a loved one or financial despair or like you name it, we all have our own unique challenges that we face. And I don't care who you are, if you're still on this planet and you're still standing. You are a survivor. None of us get through this world unscathed.   Brian: None of us. Perspective allows us to really pay attention to what other people are going through, but what perspective is really doing is allowing us the opportunity to get in someone else's world to gain perspective, to apply to our own. So it's not necessarily about what each one of us are inherently able to handle. It's that I think we're all dealt a unique set of cards and it's how we play those cards that matter. So the thing about pain, and I'm just going to speak to that, because my experience was pain, your brother's experience was pain. He had physical pain, probably emotional and spiritual pain with the loss of two fingers and a deep emotional, mental, spiritual, and probably manifested as physical pain with the loss of his son. Pain, that's what it is. Now, pain can't be measured independent of the person experiencing it. But the one thing we know is that it's a universal human experience, we all experience pain. And so what's important is not to question can I or could I have handled that? But just to say I've handled everything that's ever been thrown my way and I'm still standing here today. So what that tells me is you're probably capable of handling a lot more than you thought you were capable of at a prior period in your life. And if something were to happen that's devastating, right in that moment, you have to choose, is this going to define me and keep me stuck or am I going to use this as fuel to who I'm capable of becoming because of what I've gone through? That's why I said earlier I learned not to get stuck by what's happened to me, but I get moved by what I can do with it.   Brian: I realize I have a gift not just in my own natural abilities and gifts and intuition and emotional intelligence and all the things. But this has given me perspective that I couldn't I couldn't have gained any other way. I can put myself in other people's shoes and know what it feels like to not be seen, to know what it feels like, to feel like nobody understands me, to know what it feels like, to have people question everything I'm capable of for my entire life, even if it has nothing to do with my physical ability, even if it's one hundred percent mental, one hundred percent job and application, they view me. As not capable of doing I know what that feels like and I've had to battle that my whole life, I don't know a single person on this planet who has never felt that way. We all feel that we all experience and it's real to each one of us uniquely so I know it's probably a lot longer of an answer than you were hoping for, but the depth of the question, I think, required that approach because it's not about what you believe you could handle based on other people's circumstances. It's about what you already have handled and what you're very capable of handling if you change the way you think and feel about what you're capable of, which, again, is typically limiting in our own belief system.   Joe: So because we're doing this recording and you and I have not talked about what we could talk about or what we couldn't talk about, I want to ask this and obviously I can always edit it out. And you   Brian: Free   Joe: Know   Brian: Game, buddy, go ahead, go ahead.   Joe: What? So when does someone say, like, did you ever have these dark moments? And this is not the part of the question that I'm going to ask. This is just in front of it. And you ever have a moment that you said, why me? Like, did you ever   Brian: Absolutely.   Joe: Ok?   Brian: Absolutely, and I have those moments still today when I get when I get hit with certain things. The reason I was able to shift out of that so quickly, I remember being seven years old and that was the first thing I remember when I woke up, one feeling like it was a dream. And then I was like in this hazy state of like what this altered reality felt like, it didn't feel real. And then it was probably a day or two before I really came to and was like awake, awake, not just like in that dazed awake. At least this is from memory, I don't know the exact timeline. This is just how I feel it. And I literally remember. That question. Weiming. What is the rest of my life going to look like, like this sucks. I felt sorry for myself. I was given the opportunity to snap out of that quickly because the uniqueness of my story drew a lot of attention to it and there was a lot of families in the ICU with us who were coming up to us saying, we're so sorry for what happened to you. This is so horrible. We can't believe how hard this must be for you as a family. Let us know whatever we can do to help. Just getting wrapped with love and support from strangers to strangers saved my life. Right. That's crazy to think about. A stranger went into action and saved my life. Had she not chosen to do that, I wouldn't be here.   Brian: So I don't take that lightly, but what's happening in the ICU with these families is we start to realize that these families that are giving us just unfiltered support. Are also questioning whether or not their kid is going to survive another 30 days from the terminal illness that they're in the ICU with. Only immediate threat to my life and not at that moment knowing whether or not I'd be able to use my arm. I knew I'd be alive and over the course of the next ten years, being with those kids and all of us who wanted to rally around this cause to help more people, to bring perspective, motivation, direction to an organization that helped us so holistically in a healing process, either physically, emotionally, spiritually, whatever. Right. I lost multiple of them to their terminal illnesses over the course of the next ten years. And so although I don't think about them every day, when I'm asked questions like that, it really centers me on grounds me because I'm here happy, healthy and productive, living a life that many would dream of. And those kids didn't have the opportunity to do so. And so I have to just know and honor that it was me for a lot of reasons, I might not know all those reasons in this lifetime, I believe I know a lot of them at this point, but I still ask that question. I mean, last week was an unbelievably challenging week for me.   Joe: I saw the story and, yeah, that's part of where,   Brian: Yeah,   Joe: You know, this   Brian: I mean,   Joe: Is   Brian: Last   Joe: Going.   Brian: Week   Joe: Yeah.   Brian: Was an unbelievably challenging week for me, for a variety of reasons. One was around this fabricated reality, around a date that in some ways is very significant, in other ways is not significant. But coincidentally or coincidentally, I got kicked in the stomach multiple times last week. And yet it didn't really totally faze me in a way that brought me down to the deepest, darkest moments, because every time I face those things, every time I start to ask the question, why me? It starts to reveal itself faster and faster the more I go through the pain. And and and so I now have this element of trust in surrender where the literally last week I was like, why do I always have this stuff happening? Why am I the one that has to deal with this? Literally? I mean, I said to my wife last week and then in the same breath, I'm like, I know why. And so for those that did ask that question still. I would just encourage you to recognize that there absolutely is a resum. Nothing happens by accident. You could call this my accident, but this was for a purpose, it wasn't on purpose, but it was for a purpose. And I realize that now more holistically than I have in my entire life, but it's the same thing for everybody else. I mean, I guarantee that your brother has learned from his experiences and having to adapt and do things with the loss of two fingers. He's had to learn and adapt. What does it mean to be a parent? And there's so many are out there who live on their lives without their child. Still a part of it. Parents aren't meant to outlive their kids.   Joe: Correct. What's   Brian: Right,   Joe: The what   Brian: And.   Joe: The worst car I could think of?   Brian: And by the way, there was this pending doom around this date last week that was connected to that for me, as well as from a parent's lens now. And the data is reference to a couple times I didn't I didn't say specifically on the show, but this last Saturday, March 6th, was the day that my son, who's my little clone, my little mini me, my my only boy and my oldest. Was the exact same age to the day that I was on the day of my injury. Twenty nine years separated. And. There was a lot to that most of what happened in the 10 days leading up to it had nothing to do with my son. But they were absolutely clarifying moments that needed to take place in that window. And Saturday was kind of a new start for me and a whole variety of ways, which was just unbelievably cleansing and freeing and purifying. And so even the questions last week, why me? Why does this always happen to me? Why do I have to be the one to do this? We're very clear. I know, and I think all of us do we just fight and we resist because it's not in alignment with what the world tells us. It's not in alignment with what the narrative is externally. Right. But it's not about being the victim. It's about recognizing that if we have ownership and accountability with everything we do, we recognize that there's always a reason, there's always a cause, and there's always a way through it if we desire it enough. That's when we start to become free.   Joe: Ok, so here's the the part where I want to talk about Blake and Addison really quickly, I don't want to stay because, you know, I know you're super productive, positive guy. And I don't want this episode to be like the Debbie Downer episode. But you went through a lot in your life up to this   Brian: Yeah,   Joe: Point. Right.   Brian: Yeah,   Joe: And   Brian: A lot.   Joe: Then, Blake, I remember you talking about this, so I'm only bringing this up because I think you've talked about   Brian: Yeah,   Joe: It and.   Brian: I've shared publicly on stuff, I'm sure I know where you're going,   Joe: Yeah,   Brian: But go ahead.   Joe: So so you said it is is on the spectrum, right, and so you there's an extra amount of attention that has to happen   Brian: Of course,   Joe: There. Right.   Brian: Of course.   Joe: So then you deal with that another moment where you said, why me? Like, I haven't I haven't. I gone through enough. Why me? Right. And then now you have yet a third time now with with Adderson with her here. Right. And I could be another time we go. What is it going to stop. Like why me. Right. I'm sure there's people out there that do not handle this anywhere near as well as you do. And I'm hoping your words of wisdom, if they run across this episode, that it will help them understand how you I mean, you can look at their beautiful faces and go, oh, it doesn't matter. You know, they're amazing. It just it's a it's a small little blip on the radar. But it's still some people can't even handle the bullet. So   Brian: They   Joe: That's,   Brian: Can't.   Joe: You   Brian: They   Joe: Know.   Brian: Can't. And by the way, there's a lot more depth and truth to that statement than than you probably even realized, I mean, to the point that when we found out about our daughter's hearing loss. The audiologist actually said to us she does have loss and she could benefit from hearing devices. And I paused and I said. She could benefit, like are you saying she needs hearing aids, like is her hearing profound enough that it's not like she would benefit? She she needs it to restore it to what we would expect are going to be? And she said, yeah. I said, why didn't you just say that? And she said, because most parents don't want to hear it. And she said that even when they do want to hear it, she said, because of the reports that we get when we plug in hearing aids, even if they go through the process of getting hearing aids, even if they go through the process of doing these things, she said. Most kids, the hearing aids live in a drawer. Because of some reason, right, that either the parents don't think it's important they're embarrassed by their kid or whatever, like there's a whole slew of things. You're exactly right. And in both those moments, by the way, when we found out about our son's diagnosis on the autism spectrum and we found out about our daughter.   Brian: It was it was challenging, right? It was absolutely challenging for both my wife and I and we both we both grieved in different ways. And why I choose the word grieve is any time we have a vision for our lives. And that reality that we've created gets stolen from us, we experience loss. We literally go through the grieving process, the multiple steps of grieving, sometimes it's anger that manifest first, sometimes it's just like absolute depression. But but recognize it for what it is like having something happen to your kid and realizing that they might have an altered future from what you always desired and hoped for them. You have to process that, but then once you process that and you start to realize like this doesn't define the kid, just like a mine accident didn't define me right. What this really does is it's a gift because what getting both of their diagnosis is as early as we did, what allows us to do is wrap them with services, wrap them with all the support they need to close the gap between whatever their diagnosis limits them from doing to what a typical kid might be capable of doing. It shortens that gap early in those foundational early development years so that it won't really ever hurt them.   Brian: Plus, the more that we talk about it not as an ailment, but just a part of who they are, right. It's no longer a label. It becomes a term of empowerment because they recognize that like they have superpowers as a result of what their diagnoses are. So the answer is yes. There's there was absolute grieving for both my wife and I, for both children. We're well beyond that at this point. But it hung with us for a while. And and there are still moments where the difficulty and complexity of our household that most people will never understand and ours is light compared to what some other people's situations are. Right. So we keep that in perspective, too. Is it harder than most parents and most households might have to be? We believe so, but it's not about like we have got it more difficult than what they have. It's just this is the cards were dealt, so we're going to play them as best we can for both of our kids. We know how lucky they are to have us. My wife is brilliant. My wife is brilliant and what she has done to allow our kids to feel authentically who they are in safe, despite all of these things, despite the fact that they know they're different in certain ways and honoring and cherishing, encouraging them to just make do the things that make their hearts happy and stand up for what is right and know that they're worthy of receiving love like exponentially.   Brian: And all these things, like my wife and I were partners, but our kids are lucky to have us at the counter to that is we also feel extremely privileged to have our kids because they have challenged me to go to depths of myself, my soul, my emotions that allow me to be more effective in the world. That had I not recognized those scenarios for what they were, which is we can handle them and let's figure out the plan forward. It probably would have made me feel stuck longer than it did. And so for those parents that are listening out there that might have kids like this or even if there's not a diagnosis, but you just have a challenging time or there's an injury or there's something like, again, nothing happens by accident. And so the only way through it is through it, and if you if you desire something on the other side, then you've got to go through and that's really what it comes down to.   Joe: Really powerful and I appreciate you sharing leading up to this interview, I wanted to talk about those things and I was just like, I know he's talked about it, but I I didn't know how to actually go after it and   Brian: You did it beautifully, my friend, it was   Joe: Think   Brian: Great.   Joe: I'm grateful that you shared. And so, OK, so now you and I know this is a big jump, but I just want to I know we   Brian: Yeah,   Joe: Have limited   Brian: No, let's go. We got it, yeah.   Joe: We have limited time and I don't and I want to get to where you are today. So then you get into the insurance business. Correct. So you're in that for you grew a company. I think it was from like.   Brian: Quarter million to 15 million over the span of a decade.   Joe: You just picked that that was just a career that you pick at one point and.   Brian: Yeah, you know what's funny, I saw depicted it sort of picked me up, I was my junior year in college, was deciding that I needed to go get an internship. And so I started looking at a whole bunch different places. And I actually ended up getting into insurance because my one of my childhood friends and my childhood girlfriend, in fact, that we grew up together. And a lot of ways I always had her parents were like second parents to me for a lot of years. And I always had a great lot of respect. But I always viewed her dad as this very successful man. But I knew nothing about what he did. And I reached out to him as a mentor, frankly, and just said, hey, I'm going out. I'm doing these interviews and I have these things. And I talked to my own parents and they're successful. They've done these things as well. But I wanted extra perspectives. And he ultimately was like, I'm going to pass on your resume to so-and-so. And if you don't get a call in three days, call me. I was like, OK, not a clue what it was. It was the only one that was in insurance. Right. Very, very amazing opportunity. And it just took off from there. And nobody grows up wanting to be an insurance, right? I mean, and if they do and if you're listening to this, I apologize if you always had a desire to be an insurance. I know there's some people who love it. I never loved it. It was a great vehicle for me. And it was a great testing ground for me to grow and develop who I was as a professional, who I was as a man. I kind of grew up in it, but yeah, no, I didn't seek out insurance. I kind of fell into it and it just it fit.   Joe: Right. So while you were there with your inner voice saying there's more out there for me, I want to do more, whatever it might be. I mean, how did you make the jump then when you left   Brian: Yeah.   Joe: There to now what you're doing, which is the coaching and the speaking and and the podcast. And I mean, I, I look at your website and I get tired just looking at all the all the different menus that I could take a look at stuff. And then I went into the podcast when I was like, wait, is he doing actually three podcasts? Like, how is he doing all this? So how did you decide how did you decide you were going to leave insurance and then pursue the Brian Bogot we know today?   Brian: Yes, so I'm going to start with the first question you asked, which was, did I always know? I knew for a long time I've always had this gut feeling that like there was something meaningful that I was meant to do. No idea what that meant. OK. And then I conditioned that out of myself, and when I first got out of college, it was like bright eyed and bushy tailed, I was going to go take over the world and make a ton of money. Right. I'm going I'm literally going to be running the company. I'm going to climb the corporate ladder. I mean, it was all external. And, you know, this is one of the things I talk about now is I chased the what like so many of us did. Right? I chased what house, what car, what amount of money, what amount of success, what image do I want to portray? What, what, what, what, what. And I lost the who along the way. And I woke up one day after having accomplished all the words that I ever desired, way earlier than I thought I would have, in a way bigger level than I ever thought I would. And I realized, like, what have I been doing all this for? The more money I made, the less I cared about money, the more I got into a successful career, the more I was like, why am I doing to myself? And then I'm running in circles with people making six, seven, eight figures who all were having high of success and they were all miserable to.   Brian: And so those were the turning turning point moments over the probably the last seven to eight years, maybe six, seven years, if I'm being real honest, because when I first started coaching, it was because I had my son and I always said that I'm going to do everything for the benefit of my family always. And I did. But then six months went by when my son like that and I realized I missed all of it except the first week because I was burning the candle at both ends, I was still living the life that I was to create this abundant amount of external success and validation that I needed to prove to myself I could do it and I never recalibrated my life. So part of providing everything for my family is with finances and security and opportunity and safety and all those things. But but but it's also love and leadership and presence and connection. And I don't want to be that guy that did everything for his family, then woke up twenty five years later and never had a relationship with any of them.   Brian: They decided that I didn't serve a role for them outside of money. It's not all about money. It never was all about money. And so it was the first in my life. I didn't have the people in my life, the mentors, the experience or the intellect myself to figure out how to fix it. So I hired my first coach. And he said to me, a month of working together, because you're going to be doing this, like, what are you talking about? He said you need to be coaching and speaking. So you've been on stages since you were seven because you've got a unique ability or a unique story and you have an ability that you're not afraid in front of groups. And he's like, you're all about building people and building businesses. Like you're always helping. You're always finding ways to level people up. You're always helping them connect dots. And I was like, yeah, whatever. I was like, I'm paying you a lot of money. Not that's how great I have to figure out this stuff. And I completely threw it out the window. And then it just kept trickling. It kept trickling in every single month for about nine months.   Brian: And then this crazy experience happened, which again, nothing happens by accident. But the universe gave me the sign that I needed, which was he told me what I needed to hear, not what I wanted to hear. And that's when I started to desire a little bit more and started to feel like maybe I wasn't in alignment. But I had to ask the question if I'm going to jump in being in coaching, is this complementary or conflicting to everything else I had because I was so significantly invested mentally, physically, emotionally and spiritually and monetarily. Right. In this other business that we built, that was the fruits of its labor were just starting to pay off. And it's like, let's let's make sure that we forge ahead on what we're doing here. So I started coaching and speaking and I did it alongside for about five years and then summer of twenty nineteen comes around. And again, I told you, I'm running in circles with people that are miserable. And I realized my relationship with my clients started shifting to more coaching relationships. We were placing multi million, hundreds of millions, tens of millions of dollars of insurance for people. And my conversations had nothing to do with insurance with the people that I was actually interacting   Joe: Right.   Brian: With at the C Suite.   Joe: Yeah.   Brian: Right. I was coaching them on how to be better people, how to be better leaders, how to change the culture of their business, think through and problem solve on things that really had nothing to do with insurance. But the insurance was how we were in the door. And so the more that started to migrate, we have this connection moment summer twenty nineteen with my wife and I. We go away for a weekend and it was one of those that like mentally, spiritually, physically and emotionally, like brother, like our souls were bonded like we were one and we're driving back to pick up our kids and she looks, everybody goes, how would you feel if you did have to go to the office on Monday morning? And I was like, that's a pretty loaded question.   Joe: No.   Brian: Why don't you tell me more? Well, I had some other I had some other health stuff that impacted me pretty significantly a few years back. I'm good now. It's all all squared away. But she said, I think you let some of this stuff allow fear to enter into your world in a way I've never seen you operate. She said, I feel like you've convinced yourself that we need the money, the status, the prestige, the security, the all of the above, what's been built. She said, I'm here to tell you we don't I don't care if we live in a cardboard box. What we need is one hundred percent of you. And she said, I don't know if you see it or not, but I see you dying a little bit inside every single day. You live in insurance. And and so she said, I think you're barely scraping the surface of your potential, nor do I think you have any impact on the world that you want. And then she said, you know, there's nobody on this planet I'd rather take a bet on than you. We took a big bet on you once and it paid off. Why don't we double down on that bet and see what you can do? And so, you know, this was one of those moments where I was flooded with fear, flooded with a whole bunch of emotions. And I had to spend three months really unpacking it with complete awareness, complete intentionality, understanding where my blocks were and ultimately came to the decision that I needed to embrace the pain of walking away from the easy button, from the sure thing, to avoid the suffering of not ever knowing what I could become or what I'd be capable of doing from an impact perspective.   Brian: So you fast forward to today and you know, I spent 10 months unpacking that business left at the time, the best year ever in that industry, the year I left and was simultaneously building the foundation for where we could go. And, you know, I'm not sure if I said it or not yet on this show. I think I did. Yeah, but but that's that's now where I'm so clear and convicted on this billion lives. I genuinely believe, like we've got an opportunity to to change the world and make people feel at a level that they've never felt and feel free. And so I know what that miserable, dark place looks like. I've spent a lot of my life in moments like that. No one deserves to feel that way, but a lot of people do. And right now, I feel more free, more fulfilled, happier and more like myself than I have in my entire life. Everybody deserves to feel how I'm feeling right now. And so when I started to get the curiosity, I didn't even lean into it. My wife pushed me. And she, along with my other coach, told me what I needed to hear, not what I wanted to hear, and it's not lost on me, the courage it took in my wife to take that leap of faith with me and give me the push knowing it could upset her entire lifestyle. And so that's what I had to honor because my kids are watching, I don't want my kids to see me do what I want my kids to see me do what's right.   Joe: Incredible. I love it, so your podcast, what are there, is there are there three, is that   Brian: You   Joe: Right   Brian: Know what, I actually   Joe: Or.   Brian: Don't even have my own yet,   Joe: Ok.   Brian: I I'm in the process of developing a few. What you've probably seen as I have Bogarts Bullets, which is a regular consistent thing, but and it's going to be repurposed into a podcast. But right now it's just on YouTube and it goes on all my social channels. We have a marriage hack's string that we've started that my wife and I, we've now done we've only done one episode, but we repurpose it into three. And then my content team and strategist's decided that there are a whole lot of thought leaders, influencers, speakers in the world that create intellectual content similar to what I have for years, Bogarts, bullets putting things out, podcasts, other pieces of content to get distributed. And then there's bloggers that are much more niche, but there's nobody that's doing both. And so he's like. If you talk about how you live, you talk about these philosophies, you talk about these guiding principles, these lessons, these things that you do. Why don't we pull the curtain back and show people behind the scenes that that's actually how you operate. And so those are the three things that you've probably found is bogus bullets, the marriage tax and then the No Limits blog. And all three of those, although they're not currently set up as podcasts, one of them will be repurposed that way. And then I'm actually in the process right now. I'll be a co-host on at least two podcasts. We're going to be launching here soon, likely three if this other concept takes off. The podcasting world has kind of changed my world in a lot of ways, in a way I never saw coming. And I've been on over one hundred and fifty other people shows in the last seven, eight months, and it's allowed me to have opportunities to meet people like you. Right. And the connection with Ken Joslyn and Steve Sams. Right. Which both were people that I was on their platforms, on their shows. Like it's allowed me to align myself with incredible individuals on this planet so that we can truly have collective impact. So those are the three shows that currently exist. But they're not podcast currently.   Joe: Got it. OK, so you have things coming up, I know that you're doing the Ken Joslin's   Brian: Yep,   Joe: Boot camp, right?   Brian: Yep, yep, I'm doing his boot camp in April, I've done two of his I've got some other speaking events coming up. And then we've also got a few things launching that I'm really excited about. So we're still doing all of our work with no limits university, which is really like the concepts and the philosophies to help people understand who they are, leading them on intrinsic journey. But we also have another entity in a movement that's called Who before what that's launching as we speak, which is really an attempt to help us change the language and narrative in society about putting more emphasis on what we do versus who we are. And it's not that one or both don't matter. It's that they both matter. But one needs to lead, which is who. And so we're going to change the narrative because it's this whole idea that you go to a networking event. And the first question everybody asks is, what do you do? And even if you asked who you are, like, tell me who you are. Ninety eight percent of people answer with what they do, not who they are.   Joe: So   Brian: Part of the   Joe: True.   Brian: Pain and suffering that exists on this planet, as so many people don't know who they are. And so a lot of the core of the work with everything we do with our coaching and the No Limits university and those things are all about that. But we're actually creating a specific movement to bring into conscious awareness this idea of who needs to be before what.   Joe: I love that is the university and the who before. What are they separate from your actual coaching piece   Brian: They're   Joe: That you   Brian: All   Joe: Do   Brian: There, it's all kind of integrated,   Joe: Ok?   Brian: So, yeah, my my I would say my one to one coaching is the only thing that's kind of outside of that umbrella. It all fits on the same coaching philosophies. But just with the people I work with one to one, it's it's just inherently different than the other structure that we have. But it's the same philosophies, what you'll know about me and a lot of what we do with the no limits you and everything is this idea that we truly have the ability, if we are aware enough and influential enough to build a life of alignment that can become self-regulating. So for me, I'm very clear on who I am. I'm very clear on where I'm headed. I'm very clear on the impact I want to have, as well as the hierarchy of importance in my life. Family being first. Right. After that, because I'm so clear, everything I do is in alignment with where I'm headed. So when you ask the question, are they all, yeah, they're integrated because they're all holistically apart and in alignment of where we're going to impact a billion lives. How those are translated look a little bit different. But they are all towards the same intent, which is to impact a billion lives.   Joe: So it's the YouTube channel, it's eventually some podcasts on their way. It's but no limits university. There's the Who before what portion of that? There's the coaching, which is one on one with you. Correct. Speaking engagements. When when? I mean, obviously, you still do it virtually, but you're actually going to be live at that bootcamp coming   Brian: Yep,   Joe: Up in   Brian: Yep.   Joe: April. So as that opens up again, I mean, when I watched you on the Growth Now summit, which I attended, your portion of, it was brilliant. I   Brian: Oh,   Joe: You   Brian: Thank   Joe: Know, I   Brian: You.   Joe: Just said, I mean, you're an amazing speaker.   Brian: Thank you.   Joe: You're just not talking to us. But you bring people in to the story.   Brian: Thank   Joe: And   Brian: You.   Joe: I just   Brian: Thank   Joe: Sat   Brian: You.   Joe: There and I was like, oh, this is unbelievable. Like, I would have paid thousands of dollars to   Brian: Thank   Joe: Watch.   Brian: You.   Joe: So it   Brian: Thank   Joe: Was amazing.   Brian: You.   Joe: Did I miss somewhere on your website? Because it's just so much on there. I can't figure out.   Brian: No,   Joe: But   Brian: You   Joe: Is   Brian: Didn't miss you didn't   Joe: It.   Brian: Miss anything. There's going to be new sections actually built on the website, Zoom. Let's put it this way. You listed a lo

Brian Phillips is Co-founder and CEO of The Basement, an integrated (technology + creativity + measurement) B2C and B2B marketing agency with its roots in production. Brian dabbled in art and worked in architecture before he took the artistic principles of rendering positive and negative space to marketing. He explains, “The positive space, the consumer journey, is one we can see and everything works.” He believes marketers can get a lot of understanding out of identifying and analyzing negative space – the things that don't work – and that these, too, can help define the client journey. He believes “Negative space helps define and form the positive space.” His interests today remain diverse. For the past year, he has avidly read scientific books, pursuing ideas related to how genetics might impact buying and selling. The agency manages all media and destinations (the social channels and websites where consumers engage), extracting and analyzing as much data as possible and using multivariate testing. As an example, the agency may “cross-reference data out of Amazon” with data from its analytics platform on the ecommerce side.” The Basement markets its clients through an often complex, multi-touch, multi-channel approach. Larger companies may have as many as 150 datapoints across their consumer journey from “high level impressions down to ecommerce platform conversions.”  Brian has found that insights gained by analyzing data about consumers in the lower funnel can provide information on how the consumer got there and what the consumer will do next. The agency measures its success through outcomes, which, Brain explains, ensures accountability. Brian says his agency's focus has always been on growth, but growth “has to be calculated.” When asked about his agency's culture, he says simply, “Stay fascinated,” and then expands on the thought, adding, “Stay curious, stay ambitious, stay competitive, stay genuine, and stay fascinated.” Brian can be reached on his agency's website at: thebsmnt.com. Transcript Follows: ROB: Welcome to the Marketing Agency Leadership Podcast. I am your host, Rob Kischuk, and I am joined today by Brian Phillips, Co-founder and CEO of The Basement based in Indianapolis, Indiana. Welcome to the podcast. BRIAN: Thank you. Thanks for having me. ROB: Excellent to have you here, Brian. Why don't you start off by telling us about The Basement and where the firm excels? BRIAN: The Basement is an integrated agency, and there's probably some backstory there of how we got to be an integrated agency with roots in a production company. It's sad but true, but one of our greatest strengths is being able to deliver on what we say we can do. I've sat at many tables with brands that are unsatisfied with whoever their partners are, and sometimes it's as simple as just being able to deliver. I think as a production company, at the beginning that was what we prided ourselves on, and over time we've evolved to include that same delivery mentality against the consumer journey and a fully integrated offering of technology and creativity and measurements with the consumer journey in mind. We've had a lot of success with brands. We're not afraid to talk about outcomes. Actually, we prefer talking about outcomes, and we prefer the accountability that comes with that. We've been very fortunate to align with some great brands, and they acknowledge and accept our approach. It's turned out to be very impactful for both their business and mine. ROB: Are those brands typically more consumer-facing, or is there some B2B in there as well? BRIAN: Mostly consumer-facing, but we do have some B2B. Certainly there are major differences there. But we really approach our work systematically and through a proprietary framework that we've developed. Technologies roll in, audiences roll into it, but at the end of the day we're still performing the same services against that framework for B2B and B2C. ROB: Interesting. Tell me a little bit more about that framework. I think you have some brands that are of a pretty big size, and their go-to-market with customers is probably very multi-touch in a way that would often be hard to measure and hard to be accountable for, but that very much seems to be what you've leaned into. BRIAN: Yeah, there's no question. It seems like the majority of our clients are that way with the multi-touch and the omnichannel approach. I think it's important when we start talking with a brand that we're all aligned on accountability, and where we're going to hold ourselves accountable and where the brands are going to be accountable. Throughout that initial phase where we're working on strategy, we have to come to consensus on how we're going to measure success. Measuring that success along the consumer journey is something that we work together on and then we measure against. So that becomes, in my opinion, a lot easier to have dialogue and to have fruitful conversations and collaborations if you're aligning at the beginning. And that approach has been the core of what we do and how we build our integrated offerings. ROB: What sorts of things are you measuring for brands? BRIAN: Oh, man. [laughs] One of our larger brands that we work with that is a consumer brand, we're measuring 150 datapoints across their consumer journey, and that's everything from high level impressions down to conversions through their ecommerce platform and everything in between. At that point we're managing all media, all what we call destinations – places where consumers engage, whether that be social channels, whether that be their enterprise websites. We're going to build that infrastructure inside of that journey so that we can extract as much data as possible. Then we want to analyze it. We want to understand if there's any insights we can gain in the lower funnel that can impact how the consumer's getting there and what the consumer's doing next. And we've got case studies where we've seen and applied insights that were upper funnel, that were on the advertising layer, where we were able to test what type of product mix through display ads – we would run multivariate testing and we noticed that these certain product mixes with color combinations and words were effective. That then translates all the way down to the way we communicate on our website and what products we show on the website, how we're driving conversions through the performance funnel online. That cross-analysis is very important to us. We use and leverage a lot of technology, don't get me wrong; technology is extremely important to our business. But at the end of the day, we want to make sure that our core teams that work with the brand are analyzing that data, and we're looking for those insights and we're trying to figure things out on behalf of the brand. Machine learning is helpful. Obviously, it's a trend and it's going to be here. It already has changed the business and it's going to continue to change the business. But at the end of the day, I think you still need to have humans involved in that analysis, and that's something that we do very diligently with our clients. ROB: It's fascinating because a lot of marketers think about knowing how to track marketing when they can track the individual user all the way around the internet, when they can get a hard link through to conversion, that sort of thing. Certainly, you will have that in cases on the ecommerce side. But it almost sounds like on the broader consumer/general market side – maybe they bought something on Home Depot's website or Costco's website or Amazon or someplace where you can't sink into the data – it sounds like maybe you're still pulling on the stages of the customer journey at a macro level to see what's pushing down the funnel. Is that how you're thinking about it? You know what the stages are, you know what people are doing; even if you can't link each person, you can still see the echoes of what you've done up-funnel. BRIAN: Exactly. That's exactly right. Amazon's a great example where we can get data out of Amazon and we can get data out of our analytics platform on the ecommerce, and we have to cross-reference those. We have to understand why this happened versus something else happened. My background is kind of an interesting background, but it certainly comes from the creative side. I often talk to my team and in general about the importance of the consumer journey and looking at it very similar to figure drawing. The way that I learned figure drawing is you have positive and negative space, and the positive space, the consumer journey, is one we can see and everything works. But with figure drawing, you need to leverage and use the negative space as templates to help you define and form your positive space. I relate that to marketing and the consumer journey in a way that says sometimes things don't work, but understanding why they don't work and having the measurements in place to understand and help define – that helps us define what's going to work and what didn't work. So we really want to look at the positive and the negative space. I think there's an idea or a wish for marketers and agencies to say, “We just want to find all the positive and that's it. That's what we want to base everything on.” We try to look more holistic than that, because we think we can get a lot of definition and a lot of insights out of the things that don't work. ROB: It's fascinating to hear such a – there's sort of a disciplined line of thinking around the creativity that probably frees you up to be creative in other ways. It's interesting how it echoes right into marketing. It almost sounds like we're talking about planetary physics or something while we're at it. BRIAN: Now you're really going to get me going. [laughs] ROB: Oh, how so? BRIAN: I study science. I don't read many business books; I never did. I mean, I've read marketing and business books, but I've found that the focus on our business and the focus on science, everything from natural order to epigenetics, is something that I've been really focused on over the past year and a half and applying that level of thinking. To your point, you mentioned the word discipline, and I think that's certainly a strength of the agency and it's something that my business partner and I have always strived for. If I were to analyze my career, I think a systematic, more scientific approach to creative is something that I've always done. The parallels of science and creativity are just so fascinating to me. ROB: I think you can't just drop epigenetics into the conversation without actually helping those of us who think we know what that is, but maybe we don't. [laughs] Can you give a definition of what that is and maybe how it ties into, if it does tie into, your work and marketing? BRIAN: Any of the scientists in your audience may say, “He's completely off,” so I'll use the caveat that this is how I've interpreted it. The genes that we have as humans are what I would consider more binary. They do simple on and off. They can't define the entire character of a person. They may define the way you look, they may define other parts of your genetic makeup, but epigenetics is a newer science that is the study of the chemicals that are how the genes are expressed. What's so fascinating to me and what really got me interested in the concept is that these chemicals, these imprints of chemicals can become part of your genetic makeup that you can pass down to your children. There may be a certain way that you move or the way that you stand that wouldn't necessarily be part of a gene. A gene doesn't have that in it, but epigenetics have put that imprint on you because of the way that things have happened through your environment. That is what I find so fascinating about it – that study of behavior and getting all the way down to that science to say these behaviors can actually be explored through genes. Tying that to marketing – I think this is way, way future-focused, but when that data becomes more readily available and people start mapping it, which they are now, how does that bring the science of genetics into the targeting of how people are buying and selling products? That is the stuff that I find fascinating and I read about. ROB: Is this something in the neighborhood of a gene drive or something like that? Is that what we're talking about here? Or am I completely out of the neighborhood? BRIAN: What did you call that? ROB: A gene drive, where they can take certain things and introduce them – like they can introduce sterilization into the mosquito population not by shooting a mosquito into a crisper or anything like that. It's called a gene drive. Basically, they can introduce this trait into the population in this external way. BRIAN: I'm not spending a lot of my time and energy on what they're going to do with that innovation. [laughs] I do think that the future of medicine is going to be more tailored based on the structural variations within people's genes. So I do think that's going to change medicine as a potential outcome. But right now, my fascination and interest has just been the data and what happens when that source, that mapping has been done, what you do with it. It's like Tesla having all the data of people driving their cars. ROB: I see. So, you're able to measure things you've never been able to measure before to get insight you've never been able to draw before, just by how deep you're able to look into the picture. BRIAN: Right. That's what we keep doing as society. We keep finding new ways to extract data, and that is a parallel to the way we look at our framework and the way that we work with our clients. How can we extract meaningful data from the journey? It's just going to get smarter and more robust, and the systems are going to be in place and the first party data is going to be there. It's an interesting time, for sure. ROB: You've alluded a couple of times to your own background and your own origin story. What is the origin story of The Basement? What made you decide to start the firm, and what have been some key inflection points along the way? BRIAN: How far do you want me to go back? I think there's some relevance to the first brush of creativity. For the record, I'm about 6'6” and I come from an athletic family, and I was a basketball player. There was a point in my life where I thought I was going to go play basketball. Certainly not professionally, but in college. And I was always an artist. When I was in high school – this was in the early to mid-'90s – I met a graffiti artist from Chicago. That culture didn't really exist in Indianapolis in a meaningful way. That culture really didn't exist in the common culture of society. Hip-hop culture was in its infancy, really, at that time. I became fascinated by that art form. I think one of the key powers or superpowers, if you will – and for the record, I think superpowers change over time. At that time in my life, one of the things that defined me was defiance, and I think that carried through my career, from graffiti art to wanting to be an animator when I saw the movie Toy Story. That became my goal. My dream was to be a character animator. That's what my career set off into: how can I make animated films or shorts or whatever? I didn't really have a definition. I ended up in architecture, and I spent a number of years in architecture. It was at this period when the internet was becoming relevant. It was getting introduced to businesses. This was pre-broadband. Everyone was on dial-up. We were just at that point in society where the internet and how people engaged online was being defined. Then I became really interested in creating these very rich, high-end experiences that eventually became online, for lack of a better term, engagements. That's how my career started. I was doing that in architecture, and at one point my business partner and I met, and I was frustrated with my career and the ceiling that I saw for myself and the work I wanted to do. I wanted to work at Pixar. I left. I just quit my job. I convinced my business partner to start a business. He was certainly more of a marketing business mind than me at the time. I was very much an artist and a producer. The combination of the two of us has worked out really well. And we left. He left McDonald's Corporation, where he was a very successful regional marketing director, and I was this young, probably cocky kid who was doing 3D animation and interactive 3D online and virtual worlds, and we took off. We ended up becoming one of the first digital agencies in Indiana, and from there we started The Basement because we saw a void with traditional agencies that didn't have an understanding of digital. We saw that as an opportunity and a void in the market and serviced agencies for the first 5 or 6 years of our business as a high-end interactive studio, doing animated TV spots, doing Flash games. We made a number of video games, we made a number of TV spots, we did a number of very high-end, rich websites for consumer brands and national product launches, until we saw an opportunity. We were really good at building the destinations and the engagement points with consumers, and we would always ask the agencies and the people we were working with, “How are we getting people here? What's the narrative? What's that consumer narrative and how do we extend it?” That's where we started to take on more direct clients. We had clients that were at agencies that went to the brand side and wanted to hire us directly. It really started to snowball, and then we built a media business, and now we have a full national internal media business and analytics business, and obviously creative is still there, still a studio. We still produce a lot of work in-house. There's a ton of content that gets produced along with consumer journey. Being able to build that content against a very robust media strategy that's looking at data, looking for data, that's the kind of integration that we've built. In a very, very short, run-on sentence, that's how we got to where we are. ROB: Brian, you mentioned something that I think is very common, which is that a creative firm starts up to work on a particular practice area that other agencies aren't focused on, and you'll either take a referral or you'll get white-labeled under them on the engagement – and then there's this jumping off point that has to come around to grow more. That's that graduation from taking other people's subprojects and leftovers and engaging the clients directly. How did you change the mindset and make that jump in the business? Because a lot of people get stuck there. BRIAN: I really give a lot of that credit to my business partner. We also have one of our vice presidents who took the client services part of the business. We all worked really hard together, and my business partner's background in the agency was account service. He knew that business. He knew it very well. He's very disciplined, and he understands how to build systems, and again, echoing the points that we made, we think systematically. So we built systems that will hold ourselves accountable, and we made sure that we were honest with each other and collaborated. We're transparent. I think that transparency was a very important key for us with our clients throughout. If we can do something, we'll tell you we can do it. If we can't do it at that time, we're going to be honest with you and we'll tell you when we can do it. That formula worked really well for us. I've always been an advocate for hiring people that are better than you, and that is what we did. At that time we had to build a culture, and we built a culture around growth not only for our clients, but for ourselves and for the individuals that are within the company. We fostered the culture, and that culture helped organically make us better. That is I think equal weight in the success of that adoption and being able to change and being able to recognize how something needs to improve. That's, again, been a big part of who we are. We have a tagline, which really is the definition of our culture, and that's “Stay fascinated.” Our culture is defined by stay curious, stay ambitious, stay competitive, stay genuine, and stay fascinated. That idea of staying fascinated is see something bigger than yourself, see something that we can become collectively. When you see something and you strive for something and you strive for growth, things need to change and things get better. That's how we define our culture, and that's how we were able to improve. Because I'll tell you right now, our account service business was not great when we started. It was good. We've made it great. ROB: It sounds like by being honest with yourself and with your clients – both of which takes discipline, which we said before – you were able to avoid getting yourself in the deep end in some areas and say no to the things that were too big while also growing into bigger and bigger capabilities along the way. BRIAN: Yeah. We expanded our services along the way. Again, very, very proud today. We've had tremendous growth over the life of the agency, and we still plan to grow. We are going to continue to grow. Thinking of it from a biological standpoint, organisms grow to the point where they peak and they start to decay. We feel that we're not even close to decaying. Growth has always been a part of our strategy, but it has to be calculated. We've said no to things that we knew we weren't going to be able to deliver against, and that I think is very important and has defined us by saying no to things versus saying yes to everything. That was a really good business lesson that we've learned along the way. And preservation of culture, because you can say yes to things and short term you can grow revenue, you can make more money – but at the peril of what? That was something we've always been very protective of: the culture, the people, the dynamics within the team. Because as we recruit and we want to hire the most talented people, then you have to protect them and you have to make sure that they are in a position to do what they're great at. The point I made about superpowers evolving – as I got further in my career and further into the growth of business, that became part of my role and what I strive to be good at. ROB: It's quite a journey, Brian. Thank you for sharing. I feel like there's a lot more we could pull on; I want to be respectful of everybody's time. Brian, when people want to get in touch with you and with The Basement, how should they connect with you? BRIAN: Certainly the website for The Basement, and that is thebsmnt.com. That's the easiest way to get a hold of us. We love challenges, and we love brands that want to swing above their weight class. We're actively looking for new partnerships. I really appreciate you taking a moment to have me on and talk about this business that we've built out of Indianapolis, which is not typically known for advertising. ROB: If people don't know, there's a lot there. ExactTarget didn't get as long in the sun as people might've wanted it to, but that was a big deal out of Indy, right? BRIAN: Oh my goodness, yes. ExactTarget has been a fantastic story, and Salesforce is there. Yeah, things are changing. There's no doubt. Things have definitely changed and momentum is with our city right now. ROB: Got that Atlanta to Indy connection with Pardot and Salesforce and all that. We appreciated ExactTarget as well. It was good for our ecosystem. BRIAN: Good. ROB: Thanks so much, Brian. Good to have you on. Be well. BRIAN: Likewise. Thank you again. ROB: Bye. Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

There was a time when marketing options for small businesses were terribly limited. In the 1990's, only mid-sized companies and larger enterprises could afford to produce a professional looking promotional video. The economics have change radically in the past two decades, and there are more options available to small businesses than ever before. Doug and Bryan discuss the dynamics of creating quality video marketing content for your business. Learn more at https://junglemedia.com (https://junglemedia.com) Doug's business specializes in partnering with companies and non-profits to create value and capture cost savings without layoffs to fund growth and strengthen financial results.  You can find out more athttp://www.terminalvalue.biz ( www.TerminalValue.biz) You can find the audio podcast feed athttp://www.terminalvaluepodcast.com ( www.TerminalValuePodcast.com) You can find the video podcast feed athttp://www.youtube.com/channel/UCV5a4QbT-dXhpgb-8HJHdGg ( www.youtube.com/channel/UCV5a4QbT-dXhpgb-8HJHdGg) Schedule time with Doug to talk about your business athttp://www.meetdoug.biz ( www.MeetDoug.Biz) [Music] [Introduction] Welcome to the terminal value Podcast where each episode provides in depth insight about the long term value of companies and ideas in our current world. Your host for this podcast is Doug Utberg, the founder and principal consultant for Business of Life, LLC. Doug: Welcome to the terminal value podcast. I have Brian Groves with me today and he is actually the owner of Jungle Media where he actually he specializes in helping small and medium businesses create video marketing. And I actually have them online on here today  to just talk about the evolution in video production because what we were just talking about before the call is how in 1996 which isn't that actually a little while ago but not that long ago. If you wanted to do any kind of video project at all the cost started at about fifteen thousand dollars and went up from there rapidly. But what's happened is that the cost of creating really pretty high quality video has come down considerably and that's really just changed the whole dynamics of the video marketing industry. You know now of course the one of the things you also have to contend with is that there's a lot of people who are just doing point-and-shoot videos with their iPhone or with their Samsung and a lot of this is proliferated onto YouTube. And so Brian I'd love to get your input, your thoughts and also to help the listeners understand what are the things that make for really compelling video marketing. Brian: Okay, sure yeah. I think how it might be easiest to begin is to break any kind of content. For marketing purposes that has video as part of it into several categories of how they're used and it's useful I think when you're talking about what your budget should be? or what kind of equipment you should be using? or what quality you need to remember that there's a difference between these three different categories. The first category which has been around forever is what I call immediate content. So this is the typical on tv mattresses are on sale. This weekend 50 off  that piece of content announcing the sale of something is very immediate. It's very perishable. It's something that is only useful for a very short period of time so that's the typical commercial. Hey there's a sale this weekend come on down we've got we've only got six left or whatever it is that sort of thing. Doug: Yeah. Generally speaking I've noticed that the more immediate your your content generally speaking the less effort gets put into production value just because it's going to be obsolete in a week anyway. Brian: Right and I'll talk about that in a second because there's levels of what is needed in any of these three categories or. Doug: Gotcha. Brian: Levels that can be contained in any of the categories but immediate just means you're...

Brian Lawson and his brother left their jobs in engineering, IT, and software development to found WebMO (Web Marketing Optimizer), a digital marketing agency. From the beginning, they focused on optimizing organic visibility/SEO and doing Google search ads, not just studying digital marketing tactics, strategies, and analysis, but digging into the “behind the scenes” mechanics. Today, WebMO is heavily data-driven, does everything digital marketing, and serves a large number of diverse and predominantly small-businesses nationwide. WebMO's “super-detailed” understanding of Google Analytics, conversion tracking, visitor engagement metrics, and the conversion heuristic enables the agency to fully understand clients' market spaces. Over the years, the agency built their own analytical tools. The combination of three major Google data points – Google Analytics, a company's Google Search Console data, and the data compiled in a company's Google my Business listing – provides a clear understanding of a company's “true space in the market.” Education is the beginning of WebMO's relationship with its clients. Brian loves to break down complicated technical concepts. He is used to speaking to groups of people, and loves running free workshops to help business owners understand complex concepts. As a result of this proactive training, WebMO became a Google Partner. When Google introduced the Grow with Google program, which encourages small business organizations, chambers of commerce, public libraries, agencies, and other organizations to participate in live feed educational workshops, WebMO was on board. Because of the huge number of people who have gone through WebMO's workshops, Google recognizes the agency as a “high impact partner.”  Education on how Google works, Brian says, “is absolutely critical.” After defining a client's market space, the agency evaluates the client's unique situation, and then makes recommendations. Because Brian's agency works with smaller companies with smaller budgets, “testing” the market and quantifying the response works well. Instead of spending thousands of dollars for a huge campaign, the clients may spend a few hundred. WebMO is then able to quickly show them the ROI on that investment. Brian says, “If it's going to fail, fail fast and fail cheap.” Covid-19 changed the agency's operations. Although WebMO has been unable to meet with clients in person, it continues its educational outreach through weekly updates. Google, Facebook, LinkedIn, Instagram, and Yelp are constantly tweaking their policies . . . WebMO is working to keep clients aware of these changes. One of Brian's more recent presentations covered “how to look at Google Trends to truly understand the impact that this [Covid-19] situation is having on your business.” Brian explains that Covid-19 has affected businesses in several different ways. Companies that provide such things as bartending services for parties are devastated. For other companies, like air conditioning repair companies and plumbers, it's business as usual. For the last category, exemplified by companies that sell cleaning supplies, provide in-home nanny services, and medical professionals who are still working, traffic has gone “off the charts.” In addition to having its own clients, WebMO partners with agencies that need an invisible number cruncher. When asked what he would have done differently when he started his agency, Brian said, he should have been “a little quicker to respond to where our clients were probably needing us most.” He seems to be doing that now. Brian can be reached on his agency's website at: www.web-mo.com Transcript Follows: ROB: Welcome to the Marketing Agency Leadership Podcast. I'm your host, Rob Kischuk, and I am joined today by Brian Lawson, Owner and Co-founder of WebMO, based in Tucson, Arizona. Welcome to the podcast. BRIAN: Hey, thanks, Rob. I appreciate you having me on. ROB: Brian, it's great to have you. Why don't you start off by telling us about WebMO and what makes WebMO great? BRIAN: Awesome. We are, as you mentioned, a Tucson, Arizona based digital marketing agency. I've always introduced our company as being a little different than quite a few others in our space because of our backgrounds. The co-founders, myself and my brother, come from a much different background than the typical marketing agency background. A lot of times people that provide the types of services that we provide, like websites and digital marketing and SEO and Google and YouTube and Facebook and all that, tend to come from either the design world or sometimes a traditional marketing background. Our backgrounds were in engineering, IT, software development, all those things. So, from the very beginning, we started approaching all of these digital marketing tactics and strategies and analysis with a much greater emphasis on the machinery, the real techy stuff that's lingering behind the scenes. You think about Google as one example; Google's a company that has 20,000 engineers and 300 designers. So, taking that real math-based, almost “super nerd” approach, if you want to think about it that way, is a good way to approach it given the kind of issues we're dealing with. We tend to be – again, compared to most – a little more data-driven, a little more analytical. We definitely tend to be sometimes a little skeptical of other things that some others in our industry are saying. That gave us the foundation for a very unique and somewhat successful agency. ROB: It sounds like that would also shape the sort of client who comes to you and resonates with you. What sort of clients are drawn to and resonate with this approach? BRIAN: We have a pretty large variety of clients, which thankfully serves us well when things in the market go up or down. We don't really specialize in any one kind. We have some larger end clients that pretty much just engage our services purely for the data analysis part of what we do. We're one of the few agencies who have a complete understanding of all the things going on with Google Analytics and conversion tracking and embracing some of the math that's in our industry, like visitor engagement metrics or the conversion heuristic. We really get super detailed on that. But interestingly, that overall idea is also very appealing to a small business. If you're a house painter and you've been through multiple agencies so far and no one's really been able to figure it out, when they hear that story, it's like, “Whoa, these guys are super into this stuff and they're really technical and analytical.” In a way, it gives that client a reason to believe that maybe this time will be different. Our industry, digital marketing, is old enough now to where most businesses out there have had at least one or two or more experiences with other efforts, and most of them haven't been exactly what they were hoping for. So as an agency – and I would say this to any agency – one of the things you have to really get out there for a client is a reason to believe that this time, things will be different. For us, it's that. It's our unique value proposition, that idea that we're going to take a closer look at the data, but because we have this deep level of understanding of how this stuff works, we're going to find a way to get things happening that maybe weren't happening before. Now, on top of that, I also happen to be a business owner, and I have been a business owner for 30 years, so when I'm talking to another business owner, it's like, “Oh yeah, you get it. You understand.” So a lot of our clients – I'd say the majority of them – definitely fall into the small business category, with a few exceptions being some of those higher end companies that want to bring us in for the analytics side of things. ROB: Very interesting. What sort of toolkit do you bring to bear on that analytics problem? I think people look at tools all the time, and often having right thinking is much more important than the tools, but having good execution is also helpful along those lines. What's your go-to? BRIAN: We've actually done a lot of in-house compilation things, if you want to think about it that way. We're very heavy on the technical side. We have a team of 23 people total, very heavy on the techy side. A lot of developers and programmers. Because of our background being software developers/app developers, we really didn't have to rely on finding third party solutions to do most of what we do. We were able to grow them from the ground up. One example is, for instance, if you're trying to analyze a company's visibility. Let's say you've got a local PC repair guy, whatever, and they want to really understand how they're doing online. We rejected this idea of rank reports way before everyone else did. Even when we entered into this business probably close to 10 years ago, we immediately looked at that model and said, “This doesn't make any sense.” Clients were getting these reports that said “Hey, you're #3 on this term and #6 on that term,” and it all seemed so useless, honestly. Clients were already saying it was useless because they were looking at these reports and saying, “Whatever. Yeah, you found that I'm #3 if I type this exact phrase or whatever; what good does that do me? What do I get? Am I going to get a prize for this? What's the reward?” So we almost right out of the gate rejected that model and said rank reports are about useless, especially when it comes to local visibility. We started creating our own analysis tools that combined, at the time – and now more than ever, in today's market – the three major data points in Google, which is the data that's being accumulated, of course, in Google Analytics, your Google Search Console data, and all the data that's being compiled in your Google My Business listing. The only way to get a really accurate understanding of your true space in the market is with all three of those data points being combined. And then taking it a step further – and again, just putting your mind in a small business owner's frame of mind, they say, “Yeah, I get that I have traffic and I understand that all these people are finding me on these different words and phrases, but again, what does it really mean?” So we'll look at a market and say, “You are in Phoenix, Arizona; there are 50,000 searches per month, roughly, for people looking for plumbing repair. As a business, you, Mr. Plumber, are visible about 33,000 of those times.” Like I said, compiling all this data. That's the starting point: understanding your percentage of market share as opposed to just saying, “Hey, you're showing up in the third spot on this particular search term.” Then it just goes from there. If you're going to have any chance of getting a client or winning a new customer, they have to be able to at least see. As a business owner – and of course, we teach them this – the very first question you should be asking is, “How ubiquitous am I? If there's 50,000 people searching per month, how often am I one of those people that at least appears in front of somebody's eyeballs?” That's just one example. ROB: Absolutely, that makes sense. You talked a little bit about your technical background and your co-founder, your brother's background, coming into starting this business. But in particular, what was it that made you decide to start this business when you did? How did you go from the technical background to “I am going to start a digital marketing agency”? BRIAN: It's interesting. A couple things. We're serial entrepreneurs, as most business owners tend to be. From early on, from about the early '90s, about 1991, we had started an IT services company that was pretty much helping businesses with, at the time, the very confusing world of internal LANs and inter-office communication and computer networking and all that, and then branching into internet configuration and everything else. So, I had a very deep, good long list of local businesses that trusted us for pretty much everything technical. This buildup started happening probably around 2009-2010 with clients saying to us, “Hey, you guys are awesome in helping with all this other stuff, but I can't find anybody that can explain this to me or help me with this.” Almost getting dragged into it from that standpoint. We were thinking, “That's interesting, but let's put a pin in it.” Meanwhile, again as serial entrepreneurs, we did a tech startup. It was a home-based internet security product. I won't get into a lot of detail, but we had the old venture capital funding and all that, and we had developed a marketing strategy for that online. And it was good, using a combination of SEO and Google search ads and all the other things. We had it really cooking. After some investors came in, they basically said, “Hey, you guys are engineers. You guys are probably really good at communicating what you know about your product, but you're not marketers. You don't know what you're doing there. Let's hand that over to this agency” – it was in New York City, one of the bigger agencies out there. “Let's let them take care of that part.” We're like, eh, okay, let's see what happens. Sure enough, we watched what they did and we were doing it better. Our results, everything about it was far exceeding what one of the top agencies in the country was doing. So of course, the little lightbulbs go off in our heads, thinking, as soon as this current tech startup is behind us, between the demand that we're seeing from the boots on the ground, all the people out there that were literally begging us to help them, and combining that with the affirmation that we were truly, truly good at this stuff, our course was set. That was about 10 years ago. ROB: It's interesting how oftentimes through that experience in another business, you find out – sometimes it can be wanderlust and you just try to do something different, but in this case you were able to find something that you could do differently and successfully. If I rewind the conversation a little bit, you were talking about some of these rather complex things. I think if you ask a client sometimes to pick an attribution strategy in Google Analytics, their eyes glaze over. It sounds like you have the strength and knowledge to be able to prescribe that for them pretty well. But marketing also requires going one step further when you're working for a client and helping them understand. How do you think about helping these owners understand something like attribution when you get to something like beyond first click, last click, even attribution, and you're trying to tell somebody that an ad gave them 20% of a lead? I think it'd be pretty confusing. How do you think about getting those concepts through to clients? BRIAN: That's a great question. Early on, we really embraced this idea of the client relationship model, starting with education. I'll come back to that in a second, but really making sure that our client is truly educated. We weren't oblivious to the fact that, for the most part, in our industry, the number one reason why clients drift away is because they make a comment that says something like, “I didn't know what they were doing.” They honestly didn't understand what was happening. So first is education. Then it's evaluation of their specific situation. Only after that we make specific recommendations as to what they should be doing. The education side – as it turns out, I love talking about this stuff. I'm a passionate advocate for the entire model of digital marketing. I love getting in front of groups of people and explaining these things. Because of my background working with businesses on the IT side, I spent many, many times in boardrooms and in front of employees from companies, really breaking down very complicated technical things into little anecdotes and analogies and fun ways to think about stuff. So I was always very capable of doing that, and I really truly enjoyed it. We got way ahead of the curve on that and early on started doing workshops, just free education workshops that would be designed to get business owners understanding this stuff. Because they're dying for information. Even today, even though our industry is a little bit more mature, still so many business owners are quite oblivious. They really don't understand even the basics, let alone some of the more complex concepts like you mentioned. So we hopped on that train big time, and interestingly, it led us – because we're also what's considered a Google Partner; we have a Google Partnership status, and about 3 or 4 years ago, Google introduced this program called Grow with Google, where they were encouraging small business organizations, chamber of commerce, public libraries, or whatever to allow Google to do these live feed education workshops. At the time, since we were a partner, they were opening it up to agencies as well, so we started becoming involved in that. We did that so much that we became the only agency, at least in the state of Arizona, that Google recognized as one of its high impact partners. That was strictly because of the sheer number of people that have gone through our workshops. I know that's sort of a long roundabout way to answer your question, but yeah, education on that stuff is absolutely critical. There's also another element as well. There's getting a client to the point to know enough to know that they'll never truly understand it, and then they basically have faith in you at that point. They say, “Okay, I get that it's really complicated. I don't think I fully understand it, but I'm fully convinced that you understand it, and as long as at the end of the day I'm seeing results and I see that you're attentive, that's really the key.” ROB: As we were chatting before we started recording, that background you have in doing this education has really helped in the moment that we're in. We are in the middle of this coronavirus national shutdown, everybody work from home situation. How are you adapting your agency to operate in this new, fully remote environment? What parts of that do you think you might stick with even once we're all back together in person more often? BRIAN: That's a great question. Like we were talking about, I love the live workshop. I thrive in that environment where I can be interactive with people and gauge – if I'm saying something that's flying right over their heads, I can usually pick that up. So the challenge, for all of us really – and this doesn't just go for workshops; it goes for meetings, it goes for everything that we're doing right now – is to try to find a way to offset that disconnect. Like we talked about before, there's no substitute for that live connection. That being said, I think there are also some opportunities right now. I think that as of today – I feel like we're still, sadly, in the early stages of this; we're hopefully maybe a third of the way through, who knows – but I think after we settle into the new normal and people realize that, “Okay, I'm going to be here a while. I can't, even if I wanted to in some cases, be as productive as I was before because I can't do meetings, I can't do this, whatever. I'm stuck at home, not even driving” – I mean, for some people, an hour or two of their day just opened up because they don't have to drive cars. Again, for business owners and for those that are truly entrepreneurial, I think they are going to shift over to this mindset of saying, “You know what? With all this free time, I'm going to use it to make things better. I'm going to finally understand this thing I never really understood before. I'm going to figure out how to program my TV.” Whatever is on their list of things. From a business standpoint, they might actually be more interested in circling back to saying, “When I come out of this, I've always wanted to try Facebook ads, but I don't know how to do it.” So I think there will be an increase in the number of people that are at least interested in listening to or participating in some form of webinar or podcast. I don't think we're there yet; I think people are still in the “I've just got to figure out how to work remotely.” But once that settles in, I think there might actually be some opportunity. Back to your question. We were doing a pretty steady series of live events. We've obviously switched those over to all webinars. Even in the month of April that we're in right now, we've allocated every Thursday morning from 9 to 10 a.m. – we're just doing updates. There's so much information coming out in waves from Google and Facebook and LinkedIn and Instagram and Yelp, and they're all offering money this and credits for that and changing their policies. So, we're allocating that time just to get everyone up to date. But then we're also layering in really interesting topics. Like I think the one we're doing tomorrow is how to look at Google Trends to truly understand the impact that this situation is having on your business. This is something anybody can do. You don't have to have this high level of analytical skills to go to Google Search Trends and see whether or not people are searching more often for this, less often for that, or about the same. Once you're looking at that data and saying, “Interesting. People are no longer searching for this; however, they really are searching for that now,” that actually might help you course correct and maybe adapt your strategies a little bit. So yeah, we're still 100% all-in on the education side. Obviously switching over to webinar, for better or for worse, and then hopefully getting back to the normal mode once all of this is behind us. ROB: Are there any interesting examples of the Google Trends shifts you've seen on behalf of clients that you might be able to share? BRIAN: Absolutely. People ask me, “How are you guys doing?” We have such a diverse number of clients that we're really seeing all three scenarios. We're seeing some that are just devastated, sadly. We have clients that specialize in providing bartender services for parties and events, and of course, they're wiped out. Their entire book of business from now through May no longer exists. Our guidance to them is saying all the people that had these events are going to have to reschedule, so even though you're not finding people that are looking to do it right now, you might find them later. We have some that are seeing no impact whatsoever. If you're looking at AC repair or plumbing repair – pipes and air conditioning systems have absolutely no respect for the stay at home orders. If they're going to break, they're going to break. They're not going to wait until everything's normal, so there's no reason why there'd be less search on that, and there isn't. If anything, we're probably going to start to see a sudden uptick of that. People are home more often, and if you're in a state like Arizona where it's going to get into the upper 80s this week, they're going to be putting stresses on systems that they didn't really have to before with their kids at home and working from home. So I would expect they may grow a little bit. The third category of businesses that we work with are actually seeing increases. We have businesses that sell office cleaning supplies. We have businesses that offer nanny services for people that come to their homes and watch their kids. Again, there's a lot of people that have to go to work. All the people in the medical industry. So there's an example of a huge uptick. Their website traffic and the amount of leads they're getting is off the charts. So we really are in an interesting situation where we get to see all three of those scenarios playing out. ROB: That's an interesting mix, and probably encouraging to have that combination of some clients that are needing you a little bit more while some of those other clients maybe need a little bit less while they figure out this time. BRIAN: Right. It's almost like having a stock portfolio. [laughs] It's good to have diversity. You've got your winners and you've got some of them that aren't so good. ROB: When you think about your experience in building WebMO – and it sounds like you have some experience from building prior businesses as well – what are some things you would do differently if you were starting WebMO from scratch that you've learned? BRIAN: That's a good question. I saw that previously, and it's always hard for a business owner to do that, when you see yourself as being like “I've got this figured out.” But I would say in the early years, we found our lane. We found this lane and we were very committed to sticking to it. We were like, “We don't want to build websites, we don't want to do social media, we don't want to get into this, we don't want to get into that.” We were very much specializing in really optimizing organic visibility/SEO and doing Google search ads, because we had that down. We mastered those two things. We were probably a little more reluctant than we could've been to just open up and be more responsive to what the market was asking for. There was probably a few years where we just said, “No, no, no, no, no.” Again, hindsight is 20/20. I don't know, maybe it was better to do that. But today, through growing and evolving or whatever, I think the lesson with most small business owners is you have to listen to the market. You have to provide what your client wants, ultimately. You can't be too stubborn about saying, “No, no, this is all you need.” But on the other hand, you can't be running around like a crazy person saying yes to everything and getting into areas that are outside your expertise. I would've probably gone a little sooner into getting more into a lot of the other stuff that we do. Now currently, we do stuff across the board. Of course, we build websites, and we have campaigns running on everything from Spotify to obviously all the social media platforms and LinkedIn and direct email campaigns. You name it, we probably do it, if it's in digital marketing. I probably would've been a little more open to doing that sooner if I could roll back time for a few years. But again, you can't really second guess it too much when you like where you're at currently. We're very happy with where the business is now. It's always tough to say – but if I had done that too soon and I hadn't really mastered it, maybe it would've done more harm than good. It is a tough question, but that's probably about the closest I can get. Just being a little quicker to respond to where our clients were probably needing us most. That would probably be it. ROB: Are there any new directions that you think you might be getting pulled in, but you're not quite sure yet? BRIAN: There's certain things that I've just never been a big advocate of when it comes to marketing in general. There's certain tactics that I'm not probably ever going to be convinced to do. Things like spam. We're never going to tell a client, “You should be blasting spam out to people's inboxes.” Sending advertisements to people's text messages is to me crossing a line that I just will never feel comfortable doing. Yeah, you know you're going to get email solicitations from people you don't know; you accept that. You know you've got to see commercials when you watch TV. You know you're going to see ads on websites. You know if you're a Facebook user, you're going to see advertisements. But texts to me are our one safe space where we can be sheltered from getting bombarded with ads. We've had clients before say, “Hey, what about these?” and I'm just like, “I don't think so.” I think I'd still be reluctant to do something that I know, anecdotally, people in general just really, really don't like. Even if there's a possible ROI on it, there's probably some areas where I wouldn't feel comfortable taking my clients. ROB: I absolutely understand that, and I totally agree with you about crossing those lines. It's interesting what you mentioned on being pulled toward social earlier and resisting it. In a way, one of the things I end up seeing as I have these conversations is a lot of the people who got really good early at doing the core search ads and that sort of thing stayed away from social when it was fluffy and then came back into it when it wasn't “Hey, let me make a nice organic post that goes viral and gets a lot of activity,” but “Oh my goodness, Facebook ads is becoming sophisticated, and look at these tools we can bring to bear.” I think there may be a theme there. Also the case in email. I think a lot of clients weren't ready to use email intelligently for a while. BRIAN: I would say that's exactly correct, and that almost mirrors precisely how we approached it. I didn't like social media management because of that very reason. It was fluffy, like you said. There wasn't a lot of ways to calculate an ROI. There wasn't as much engineering and math and science behind it. It was way too obvious what you were doing and not doing from a client's perspective. There wasn't anything you could bring to the table other than really clever writing skills. It just didn't go to our core value. It's like, we're math guys, we're science guys; how in the world does that apply to making a clever, quippy little Facebook post? But then, like you mentioned, things got a lot more interesting when some of these more sophisticated targeting tools – that's about the same time we started hopping into it, because then there was a value add. That's the thing. As an agency, as a business owner, or whatever, if you're not doing something that's adding value that's obvious, your lifespan with them is going to be limited. I always explain that with any transaction. You have this perception of value that the client or the customer sees, and if they see the cost being at about the same level – there's a value, there's what you're getting, and then there's the cost that they're paying for it – if that is out of balance, if they feel like “I'm paying too much because they're not doing this,” then it's going to be trouble. The problem that we ran into, and a lot of people ran into with social media management, is that it's so obvious what you're doing. There's no secret. They're looking at your posts, and for better or for worse, they're saying, “That's it? My 16-year-old could do that. I'm paying $1,000 a month. I could just hire a part-time person and have them do it all the time.” So it's really hard to explain or to get across to somebody that what you're doing is something that you're uniquely qualified to do, that somebody else couldn't do as well. About that time when ads became a little more sophisticated or whatever, it fit into – one of our core, principal beliefs is this idea that there are no expert marketers, only experienced marketers and expert testers. So, we started embracing this idea that every single strategy out there is probably worthy of testing. If you're looking at Facebook, if you're looking at Instagram, if you're looking at Spotify, whatever, you don't have to buy into this idea that you spend thousands of dollars and do it whether it's working or not. You just have to take a testing mentality and say, “I'll try it. I'll throw a few hundred bucks at this.” And if you're working with somebody like ourselves, who's very good at analyzing data, with a relatively small budget we can drill right down and say, “There you go. That little budget that you ran for 2 months, here's precisely what it got you. We may have run across the tactic that will work.” On the other hand, some things don't work. It's marketing, right? You're going through your ideas; some things are going to work, some things are going to fail. If it's going to fail, fail fast and fail cheap. That is the beauty of digital marketing. You don't have to necessarily do an ad buy that you're committed to for 6 months. You can actually try a small budget test. I know that was a long circle around, but that mindset of adopting this idea that our job is just to test things for our clients – we just need to execute tests – that then opened up everything. Everything from Yelp to LinkedIn to Bing and YouTube and whatever. That's what got us into that, after that first wave of pure social media management abated a little bit. ROB: That seems like a great principle to carry forward, this idea that you might not say no to something you don't believe is effective; you can test it, and you can even probably keep testing it as long as you are changing something and you're not just in a rut of experimental nothingness. BRIAN: Exactly. That idea of A/B split testing everything from your landing pages or conversion pages to your ad copy – again, the beauty of digital marketing comes back to data. If you have data, you can literally look at it and say, “That ad got a 3% click-through rate and led to this sort of visitor engagement when they got to my website. This ad had a 4% conversion rate, but had lower visitor engagement.” Okay, that's some great information. It's very unique that way. It's extremely hard, if not impossible, to get that level of detail on traditional marketing methods. Radio, TV, billboards, magazines – there's basic things you can do, maybe track phone calls, but the unique thing is you can't get into the mind of somebody watching a TV ad and see how they're reacting to it. When they come to your website or a landing page, based on all the math that we are able to apply to this, you can really understand the people that are there that appear to be engaged, the visitor engagement metric. It's pretty common in our industry. It's exciting to me. I'm super passionate about it. This is the kind of thing where I teach people this in a workshop and a lightbulb goes off. They're like, “That makes sense!” You can actually get a better understanding of if your marketing is even moving generally in the right direction. ROB: You definitely know your numbers, Brian. When people want to find you and WebMO, where should they look you up? BRIAN: You can just go to www.web-mo.com. That's our website. Or you can just type “WebMO Tucson” or “WebMO” Arizona, “WebMO.” You're going to find a few references to us out there. We do work with clients all over the country. We're based in Arizona, but we are definitely nationwide in terms of the clients we work with. We love to partner with other types of agencies. We have a lot of partnerships with website designers, traditional marketing agencies, where we provide these services behind the scenes and basically make you look awesome because we're back there crunching all these numbers and generating all this great data and reports. Meanwhile, you're talking to your client and saying, “Hey, look what we did!” Sot hats a good way to initiate the conversation. Sign up for a workshop. Ask for a free report where we can obviously analyze your market. There's lots of actionable steps once you get to the website. ROB: Excellent. Thank you so much, Brian. Best wishes to you and WebMO going forward. We'll look for you online. Enjoy. BRIAN: Thanks, Rob. I appreciate the time. Stay healthy and safe and all that good stuff. ROB: Indeed. Take care, Brian. Thanks. BRIAN: Thanks. ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

Zach speaks with Dr. Brian Williams, an accomplished surgeon and highly sought-after public speaker who shares his insights on racial trauma, resilience, and social justice. Thrust into the national spotlight in July 2016, Dr. Williams became a voice for racial reconciliation after a Dallas sniper shot 12 police officers at an anti-police brutality protest. At a press conference days after the tragedy, he voiced his concerns as an African-American man with regard to racial injustice and simultaneously decried violence targeted at law enforcement. He now travels nationally inspiring audiences about resilience and social justice at the intersection of race, violence, and medicine. He walks us through his actions that tragic day, talks a bit about his experience with the Dallas Citizens Police Review Board, and offers several pieces of wisdom for young professionals seeking to build effective partnerships for their personal and professional development and journey.Connect with Dr. Williams via LinkedIn or Twitter, and check out his personal website by clicking here.Interested in his podcast Race, Violence & Medicine? Follow this link to listen on a variety of platforms.Visit our website.TRANSCRIPTZach: What's up, y'all? It's Zach with Living Corporate, and you know what we do. We have authentic conversations with real folks to center black and brown experiences at work, and so if you are working any type of 9-to-5, even if it's your own 9-to-5, or maybe you're working, like, a 3-to-6. I don't know. I don't know. I don't know what y'all--you know, if you're out here working, you're grinding, you're at work, you're an underrepresented person, this is the platform for you. And so we have these conversations--and it's not just me talking to y'all or kind of, like, ranting into the ether. It's more so me having conversations with black and brown executives and different types of professionals, public servants, entrepreneurs, educators, activists, creatives, artists, and we're doing this all with the goal of amplifying underrepresented voices at work. And so again, we have a really great conversation. The person that I'm really excited to talk to today and introduce to you all, Dr. Brian H. Williams. Dr. Brian H. Williams is a first-generation college graduate who earned a degree in Aeronautical Engineering from the United States Air Force Academy. After six years of active duty military service, he followed a different call to serve and enrolled into medical school at the University of South Florida Morsani College of Medicine. He did his general surgery residency at Harvard Medical School/Brigham and Women’s Hospital in Boston, Massachusetts and a fellowship in trauma surgery and surgical critical care at Emory University/Grady Memorial Hospital in Atlanta, Georgia. Upon completion of his training, Dr. Williams served on the faculty at UT Southwestern Medical Center in Dallas, Texas, where he taught and mentored students, residents, and fellows. Dr. Williams is well-known for his role in treating victims of the July 7, 2016, Dallas police shooting. He was the trauma surgeon working on the seven injured officers who were emergently transported to Parkland Memorial Hospital. At a press conference following the tragedy, his heartfelt comments about racism, gun violence and policing touched thousands. Unbeknownst to Dr. Williams, his impromptu speech became a viral media event, and his life of comfortable anonymity ended. In addition--Brian: That's a mouthful. [both laugh]Zach: It is, but it's real though. In addition to his work as a trauma surgeon, Dr. Williams travels the country as a thought-provoking speaker sharing his unique insight on resilience, gun violence, and racial justice. He is also an opinion writer featured in the Dallas Morning News and hosts the podcast Race, Violence & Medicine. So y'all, we're gonna have all the links. If y'all don't remember the black doctor who was--it was all on the Twitters, you know what I'm saying, it was all on the social media. If y'all don't remember all that, we're gonna have all of his reference materials in the show notes, but, you know, that will be after y'all listen to the show. Dr. Williams, how are you doing?Brian: I'm doing fantastic, Zach. Thanks for having me on.Zach: Man, thank you for being here. So let's get into it. You were already known within your field, but you were thrust into the national spotlight after treating victims of the July 7th, 2016, Dallas police shooting. You were the trauma surgeon working, and so you were actively, right--like, I remember even in that video, you were--it was clear that you had just got done working. Like, you were--you were working. You know, I'm really curious. Considering your personal experience with police and the history of policing in black communities, what was going through your mind, like, just treating--like, in that situation? Can you talk about just what--of course there's no question as to your oath and your commitment to deliver care, but what I'm trying to understand--so, like, I want to be very upfront with that. What I'm trying to understand though is, considering your own experiences and your own identity, like, what was it like? Was it automatic? Was it just like, "Look, this is what I do?" Like, can you walk us through that experience?Brian: Sure. In that moment, when the officers were coming in, nothing else mattered. I just fell back on my training. So my experiences, my life experiences, that was not a factor in how I approached what I did, and, you know, it's a large team of nurses and doctors and students. So it wasn't just me, although I was the trauma surgeon that was on call that evening at the hospital. But in that moment, I'd give them the same sort of care I give any patient. Like, I do not differentiate based on occupations or race or ethnicity or--you know, all of those ways we try to categorize people as being different. That matters not to me. At the moment, I just saw a human being that was severely injured and critical, and I am trained to do things to try to save their lives. So that was what--like you said, it was automatic. It just was a crisis. My training kicked in, and I went to work.Zach: And so then talk to me a little bit about, like, so--you know, so after the care had been delivered and, you know, after you were done performing surgery and care, again, to the victims, you know, you had the conference. At what point did then, like, all of the emotions and thoughts and things come rushing back?Brian: Well, let me walk through the timeline of those few days. The shooting was on July 7th, 2016, but you may or may not recall that on July 5th, there was a shooting, Alton Sterling, in Baton Rouge, and on July 6th, that was Philando Castile in Minnesota. And then we had July 7th. So then on July 7th there were actually protests happening all around the country to bring awareness to this ongoing issue. People remember Dallas because of the tragic shooting that occurred there. This is happening all over the country. So I was aware, in those preceding couple of days, of those two deaths, and you could imagine that the public discourse was basically a screaming match about black lives matter and blue lives matter and all lives matter, and there's all this negative talk. So when I went to work on July 7th, I was aware of that but didn't expect this sort of tragedy to occur. A few days later, on July 11th, was when the press conference occurred that you referenced. So there was a couple days between the time of the shooting and the time of the press conference where I pretty much just cut myself off from society. I wasn't watching the news. I wasn't listening to the radio. I wasn't reading the paper. I just was in my own little bubble, because that night was--it's the worst night of my career. It's something I still think about to this day. It just really got to me for a number of reasons, but the big thing was that this was fueled by intolerance and hate and racism, and all of these elements that we don't discuss about in an honest, open manner fueled this event, and to lose any patient--but that happened on a night that was particularly volatile and unfortunately became historic for all of the wrong reasons. And going into the press conference, these were the things that I was thinking about - you know, what's going on in our country? What role am I playing to bring us together? Am I doing enough? What have I done with my life? There was just a mix of a lot of different emotions and thoughts which I didn't have the answers [to] or wasn't really able to process completely, which takes us to the press conference that you mentioned, and that all kind of spilled out in the moment without any plans or preparation. I just planned to sit there, just to be seen, because my wife felt that the country needed to see that there was a black surgeon there that night trying to do the right thing.Zach: You know, so let's talk a little bit about the conference, right? So, like, at the conference following the shooting, you said, quote, "I want the Dallas police officers to see me, a black man. I support you. I will defend you. I will care for you. That does not mean I do not fear you." Can we talk about, like, what you meant here? Like, what does that--and it's interesting, right, because it's almost--one could almost argue that those things are... like, there's a duality there, right? So, like, when you said this, what did you mean?Brian: Right, and that's exactly the word I was going to use. That's the duality that I think many black people in this country deal with. So to break it down into two parts, when I said "I support you," I'm a child of a military veteran. I have a lot of military veterans in my family. I went to the Air Force Academy. I was an Air Force officer. So I know what it means to wear a uniform, I know what it means to serve something greater than yourself. I know what it means to make sacrifices to serve a greater good. So although I'm not a police officer, that sort of ethos is not something that was foreign to me. Zach: And so, you know, because you took all of this--like, you took all of this, right? Like, so your fear, your frustration, your dedication as a public servant and as a consummate professional, and you mobilized that into an effective partnership to actualize change, right? And so here's my challenge though, right? My challenge is I can't look at any point in American history where police have done right by black people. So, like, just the historicity of policing in America for black bodies, and, like, not to mention, like, the pathological narratives that majority media propagates, as well as the institutional systems and laws that make holding police accountable so incredibly challenging. And so I'm really curious, 'cause I--I know that I'm not the only person who has these challenges. I don't doubt that, Dr. Williams, that some species of this has been on your mind at some point of time, and so I'm curious to know, like, with those things in mind, what was your journey to become, like, the chair of the Citizens Police Review Board, and can you explain what it meant to manage through those relationship dynamics?Brian: Yes, I'm on-board with what you're saying as far as the challenges, and I guess we'll get back to that in a second, but as far as the journey to the Citizens Police Review Board, that was--the mayor's office reached out to me about potentially joining the board as a chair, and that was because a prior chair was turning out, so he needed someone new. Now, the Citizens Police Review Board is meant to be this body that will hear complaints from citizens about their interactions with police, and they can bring them to the board, we can deliberate and try to give them some resolution. So that's what the board existed for at that time. I didn't know that the board existed when I was asked. I didn't know what it did. I didn't know if it was worthwhile. I didn't know if I had the time. I had all of these questions about the board, but I asked around and learned about it, and I said--I thought, "Yes, this can be something good for the community. It can be a voice for citizens," and I felt that I could make a positive contribution to all of this. It was definitely challenging. I learned a lot about the Dallas Police Department. I learned a lot about community activists. I learned a lot about various board members in City Hall. So there are a lot of stakeholders working towards public safety, and to bring them all together to come to some sort of collaborative effort to ensure that the public has trust in their police department is challenging, and I think it's actually now an ongoing journey now that the board has been revamped and given more support as far as resources, personnel and a budget, which we did not have when I was a chair. Zach: And so I'm curious though, right, like, when you talk about--it's just interesting, because I don't think that we have a lot of examples in American history when it comes to, like, relationships where the underrepresented voices have, like, actual authority over a majority group and things don't become strained, like, either quickly or over time, and I think authority and accountability is a struggle for anybody, right? So I don't think that that's unique or exclusive to dominant and sub-dominant groups, but I'm really curious about, like, what did it look like, especially--like you said, at the time that you were the chair there was not a budget. Like, what did it look like to really be the chair on this review board and talk about right behaviors? Like, do you feel like you were able to have honest dialogue? Do you believe that there was, like--do you believe that you had the actual authority to kind of, like, drive substantive change? Like, what did that look like for you?Brian: So I think that everyone involved knew exactly who they were getting with me as chair. For one, they saw my statements at that press conference. So I [?] there. Two, I wrote an opinion piece that published in the Dallas Morning News where--actually, I wrote two regarding the police, one that talked about the history of slave patrols and how this distrust in black communities goes back for hundreds of years. It just doesn't happen overnight. And I talked about, you know, police departments have historically been there to maintain control over communities of color. It wasn't about public safety or protecting their rights, it was about keeping communities of color in line. So that is the history with which we need to reckon in order to move forward. So everybody knew exactly what they were getting with Dr. Brian Williams, [laughs] which, you know, had its pluses and minuses. I think the benefit was they couldn't accuse me of having any kind of agenda, right? I was criticized from both law enforcement and, you know, black civilians for the comments I made. And I, you know, received praise as well. So I feel I was pretty much solidly in the middle of all of that that I could equally appeal to and offend anybody that was involved in moving the Police Review Board forward.Zach: So your journey didn't stop there, right? Like, what did you learn about yourself? Like, what were some of the main things that you learned about yourself that then prompted your transition from Dallas into the South Side of Chicago?Brian: Well, and I'll just say, you know, that last comment I was obviously kidding when I said offending people. [both laugh] But I guess the point there was I was moving forward with this mission to ensure a voice for the citizens of Dallas with integrity, and I did not try to have any sort of self-gain from it. It was about serving the city of Dallas and the people of Dallas.Zach: Which is rare, right? 'Cause I think, especially, like, in the political climate that we're in today, right, like, you see these voices, like, on the far right who--like, they're black voices. Like, they're tokens, like, coming and, like, sharing specific talking points and narratives without any, like, real intellectual substance behind them, and I think what really intrigued me about you--'cause I've spent a majority of my life in Dallas, and my mother is still in Dallas. I have family in Dallas, and so I was very familiar with--like, with your work and your statements, and they run very true to me and sensitive for me considering that I'm from that area, right? So what I'm curious about is did you ever feel any pressure to kind of, like, lean one way or the other or take on certain agendas or certain talking points that you yourself didn't agree with from a principle perspective?Brian: The short answer to that is yes, and I should say, you know, I wasn't immediately embraced by citizens that were working on police reform. [They didn't?] know who I was. You know, I was a new quantity, and people have been working on this reform for decades, right? These are Dallas natives that were born and bred here in Dallas, and I was--Zach: The activist culture is deep, right? There's a lot of community servants and activists who have been on the ground. So yeah, I'm right there with you. And it's hard. It's hard to break in, right? Like, when you're new and, like, the main thing you have when it comes to community activism--from what I understand, because I would not consider myself a community activist because I know that I want to respect that work, but what I understand is, like, really it's your relationships--your social capital is, like, gold, right? That's, like, the only thing you have, and if you're unknown, then it's hard to, like, you know, break the ice.Brian: Exactly. And I will say your podcast is a form of activism.Zach: I appreciate that. Thank you. Thank you, Dr. Williams, man. You got me blushing, man. [both laugh] Brian: You're doing it, man. You're doing it.Zach: Man, I really appreciate it. So let's talk about South Side, Chicago. Like, you transitioned, you went there. Like, what was the call or the impetus to transition from Dallas to Chicago?Brian: Well, my journey in health care--I mean, I've always been very mission-driven about what I can do to eradicate racial health care disparities, and that is a nation-wide mission, right? That can occur anywhere. Now, as a trauma surgeon, I'm particularly focused on gun violence as well. So South Side, Chicago, you know, there's a lot of gun violence here. It's frequently talked about in the media in ways that aren't--I think that dehumanizes the population that's there living within these violent communities. There was a new trauma center that opened up in the area, and several of my mentors were here at the trauma center, so there was this perfect storm of the mission that I want to serve with a community that was very active in getting this trauma center here built with people I know that had flocked here, and I said, "You know what? I would like to be a part of having impact that will cross generations," right? And I think it's happening right now, and that's why I wanted to join this group here. As far as Dallas, you know, that was not an easy decision. I had been in Dallas--I was in Dallas for 9 years. That's the longest I've been in one spot my whole life. It's now my de facto home. [laughs] If Texas will accept me, it's pretty much my de facto home. I've been moving my entire life as a military kid, as a military officer, you know? I feel home in Dallas. I still follow what's going on in Dallas. I'm interested in what's gonna happen to my home city. Zach: And so, you know, I'm interested, right, in addition to this you're a respected health care leader. Can we talk a little bit about how your work and the legacy of racism impacts health care inequity, right? Like, so you're coming in, and you're in Chicago, and yes, like, you're supporting--there's a gun violence issue in South Side, Chicago, and I--you know, honestly, I really do wish that some folks never found out about Chicago, because I feel as if it's, like, the default when anybody ever wants to pathologize black folks. It's very annoying. It's just like, "Golly, I wish that--anything Chicago, I just wish y'all wouldn't have known about it." But, you know, in your work, can you talk a little bit about, like, how health care inequity shows up, right? Like, that's been an ever-growing talking point or just point of awareness, right, like, in headlines and mainstream media, growing awareness around health care inequity for black and brown folks juxtaposed to majority members, white counterparts. Can we talk a little bit about, like, what you've seen from a perspective of inequity and kind of, like, how you've combated that as a black surgeon?Brian: I would like to see us get to a point where we just get real about what health care disparities are and health care inequities. This is the legacy of racism in this country. It's about health, poverty, housing, education, employment. Like, there are so many things to unpack and address. Health care is one part, and that's where I happen to be, you know, an expert in that particular field, but I recognize that what I do in the hospital is not gonna be enough to uplift these communities in need. And like you said, I don't like to pathologize Chicago either. I'm coming here to help, but I don't know how to talk about it without being offensive to people that live here, right? Like, who am I to talk about their community? So I'm trying to be sincere about my desire to contribute, to uplift the community without being offensive to the folks that live here and are actually gonna be doing the work for a long time. So I completely agree with you that even I feel like an outsider sometimes in doing this work.Zach: So then, you know, I think--and I'm really excited, and I'm thankful that you've been able to come on the podcast, because I think what really intrigued me about having you on, beyond you just sharing your story and the work that you've done and that you do, is around, like, the concept of effective relationships and building relationships with individuals that you may not feel immediately safe with or comfortable with, and I know that that involves a certain level of emotional labor for you, even today, right? I'm curious though, like, if you could give younger professionals any advice about building relationships--and when I say relationships, I'm thinking more like coalitions for your personal and professional development and journey. Like, if you could, like, boil it down to, like, three things, what would they be?Brian: I would say, first and foremost to young professionals, nothing is worth sacrificing your dignity for acceptance. What I mean is that the papers and the promotions and the titles, like, if you have to leave part of who you are at home, if you have to compromise your integrity and your ethics and your purpose to achieve those goals, those goals aren't worth it, so do not hand over your dignity for acceptance. That's one. Two, you need to set your boundaries. If you don't set your boundaries someone else will set them for you, and you may not like them. And actually I believe that if you set your boundaries, that will lead to greater connectedness with people, not less, because you are respecting who you are and what you stand for. You're not letting anyone else compromise that for you. And the third thing is just always keep your end goal in mind. As you're going through life, your profession, like, think about what it is you want to accomplish, where you want to be. If you never lose sight of that, then all that noise and chaos that you encounter on the way, you'll be able to filter through that and not lose sight of the end objective. So people call it your North Star, your purpose, but I think your end goal, whatever that is, never lose sight of that.Zach: Man, Dr. Williams, this has been a great conversation. I just gotta thank you again for being a guest on the podcast. Any shout-outs or parting words before we let you go?Brian: No, Zach. First of all, thank you for--I'm honored that you asked me to be on the show, and I'm glad that we were able to make this happen. And I'm always happy to engage with listeners. They can check out my website, BrianWilliamsMD.com. That's Brian with an I. I'm pretty active on Twitter at @BHWilliamsMD. But if you do drop me a line, email or direct message, I will get back to you. And you talked about making connections. That's one way that I have increased my connectivity with the universe. Thanks again.Zach: Man, thank you so much. All right, y'all, you know what it is. You've been listening to Dr. Williams, surgeon, speaker, educator, public servant, man... just overall dope individual. 'Til next time, this has been Zach. We'll catch y'all next time. Peace.

Brian Burke, based in Santa Rosa, California, is a real estate investor and the President and CEO of Praxis Capital, which is a vertically integrated private equity investment firm. He established this firm back in 2001. He began his career in 1989, buying his first rental property which led him into the world of multi-family then commercial investing.  Brian is a successful entrepreneur and syndicator - today he shares how he started his real estate career and giving back to his community after the wildfire in California. He also discusses his investing strategy, where he’s looking to invest, what to expect from an investment and his future plans. Some Of The Highlights: His First Real Estate Investment and His Business Today His Work Strategy and Advice For a ‘Rainy Day’ In Business Brian’s Retirement Plan What is the preferred return?    Connect with Brian: Website: PRAXCAP.COM - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  TRANSCRIPTION Intro: Hey guys, this is Eden and today is a very special episode because we are going to host Brian Burke, who is one of the biggest investors on this show to date. Brian had completed half a billion in real estate purchases this year alone after a long and beautiful career that lasted for 30 years and still counting. When listening to this episode, I was personally amazed by how humble Brian is and the sheer perspectives and mindset real estate investors to have despite the fact that they never met before. Also, today we would like to ask you guys for a favor. If you love our content and feel like you're learning from this podcast, please go on iTunes and give us a five-star review. This helps the podcast to rank higher and the best, part if you give us five-star review, shoot us an email at Hello@donandeden.com with the content of the review and your phone number, and you'll get scheduled for 30 minutes phone call with me and Don where you can talk about real estate and get answers for the questions you always had. So, without further ado, let's get started. Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies. Don: Hey Brian, welcome to the show. Brian: Thanks for having me on Don. Don: How's the weather in Santa Rosa, California? Brian: Oh, it's a beautiful day today, almost 80 degrees this afternoon and in November, which is a little unusual, but I'll take it. Don: I like to skate. It's like my hobby. So, I went to L.A., I went to Venice. I took a month off, just wanted to skate, took my skates with me and went there. Some people said it's the best place for anything that has wheels. And so, when I got there, that was late May and it was raining. It was like rain in L.A. and people told me it's very rare. That never happens. And it was kind of cold. And so, one of my friends that lives in California said that the weather over there was pretty unusual this year. Would you agree? Brian: Yeah, it was unusual. A lot of rain this spring and a lot of heat this fall. So, it's been a little bit unusual. But I would say the best weather in California is probably September and October. Those are usually some of the nicest months and people think that summer is probably the nicest, but it's not always the case. Don: Yeah not always the case. Is it still burning over there? I know you guys had the wildfires. Brian: There's a large fire. The largest fire in our country's history just got fully contained yesterday. And that was about a couple miles up the road from our office. So, we were under mandatory evacuation last week. And this week, we're back in action here in the office. Don: As sad it is to say that, I'm sure that these wildfires pose some great opportunities for real estate investors. Am I right? Brian: Well, once in a while they do and we had a fire in our city two years ago that wiped out 5000 homes in our city. We raised a fund last year to rebuild homes and our city and we raised about $8 million and we've been building single-family homes on burned-out home sites where the owners decided not to rebuild and elected instead to sell or move to a different area, put their lots up for sale and we're putting spec homes on those lots and got a couple of dozen homes under construction right now. So certainly it does breed some opportunity. Don: Not only opportunity, in this case, also give back to the community that is your city. Eventually, you want people to live in it and feel happy about it. Because that's home for you. Right? Brian: Yeah, people want the city to be put back the way it was. And we're doing our part to help do that and at the same time provide much-needed housing. When you lose 5000 homes in a city of 250,000 people it makes a real impact on housing demand, and there's a need for housing here. And we're helping to provide that which is pretty exciting. Don: That's beautiful. So, I know your real estate career is a very long one. You're one of the most successful entrepreneurs and syndicators on the show to date. I know you've amassed a portfolio of 250 to 300 million if my numbers are right and you've completed your half a billion in purchases of properties this year, am I right? Brian: Yeah. 2019 is a banner year for us. We crossed the half a billion-dollar mark and real estate purchase, which is an incredible accomplishment for me to even say that it is weird. I never imagined that in my lifetime I would do something like that. But we managed to pull it off. Now we've got a portfolio consisting mostly of multifamily properties. Our business focuses primarily a hundred units and up multifamily all across the US and we've got about 3000 units that we've done. Our portfolio now is about 250-300 million of value. We still do some single-family here and there. Of course, our fund where we're building homes in our city, so we're kind of a multidisciplinary real estate firm that started in single-family migrated to multifamily, but once you have developed roots and single-family, it's hard to lose those. Don: Yes. I started single families too, and let's be honest, it's fun. Even when you're doing commercial, it's still fun to do some projects there as well. So, let's talk about how it all started. When did you make your first steps in real estate? What was it back then? Because I know you've been doing real estate for 30 years, right? Brian: Yeah, my first real estate investment was a little over 30 years ago. In 1989 was my first real estate investment. Don: Just a side note. I was born in 1989. Brian: You were born? Yes. So, when you were busy being born, I was busy trying to find a house to buy and I made my first real estate investment. I didn't even own my own home but I bought a rental and fixed it up a little bit and a couple of years later sold that and I started doing some house flips, one house at a time and I was still working at the time and this enabled me to make a living on my job and then invest in real estate to build my future. Don: What a smart decision! So, one thing led to another and now you are in control of over 500 million worth of property in multifamily which is amazing. So, tell us a little bit about the first deal in multifamily. When was the first time you decided to buy a commercial property? Brian: My first multifamily was about 16 or 17 years ago. And it was here in California, it was a 16 unit apartment building. And what I was doing is I trying to figure out how to invest in commercial real estate, but I just didn't understand it very well. I didn't understand what the numbers meant or how to value it or how to evaluate it. Two rental houses that I accumulated through my house flipping business and flip one, keep one flip one, keep one. So, I had a couple of rentals I wanted to sell and I wanted to do a 1031 exchange and exchange up into an apartment building. It just seemed like it was an interesting way to grow the business and have more economies of scale and cash flow and all that.  So, I reached out to the real estate agent that was helping me sell my flips because he was a CCIM which is a certified commercial broker. And I said, "Hey, I don't understand any of this and will you teach me?" and he did. He taught me how to read an income statement and what to look for and all kinds of different things. And then not long after that, he's told me my first apartment building. I did a 1031 exchange and never looked back. Don: How was the first investment? Was it a good investment, a bad investment? Brian: Funny story is I just sold that property like two years ago. So, I kept it for a long time and I was able to do a 1031 exchange into an oceanfront condo in Hawaii where I rent that out and, maybe one day I'll even be able to move into it. Who knows? Don: We all have dreams. Being busy in real estate, you never stopped working. So, I know we talked a little bit before the show started. I asked you about the ways that you make money when you own such a massive portfolio, but most of it you syndicated. So, most of it, you had to raise money. And you had to structure a deal in which your investors are being paid first because I know you care about your investors. So how do you make money? How much money do you make on these types of deals that you're acquiring? What are your goals for the future as far as your financials? Brian: I started just entirely doing things with many of the resources that I could collect together. My first single-family investment was done with seller financing and then after that, I was like cash advance credit cards and getting signature lines of credit and all crazy kinds of things. I always tried to learn by putting my own money at risk. Then once I figured out how to do it right, I would go to investors and have investors invest. It took me about 12 years to start raising money from investors. And I did it for my single-family business.  First, I raised a blind pool fund and I split the profits 50-50 with my investors while we were flipping homes, and then when we move into multifamily, we're seeing a lot of money from investors. If you're going to buy half a billion dollars in real estate, it takes a lot of capital to do that. We were fortunate that a lot of investors were interested in partnering with us and putting up capital. So generally, the way we work it is the investors provide most of the capital for any multifamily acquisitions that we acquire. And in exchange, the investors get all of the profits until they've received a certain rate of return. Turn, once they've received that specific rate of return, then we start splitting in the profits and our splits usually start around 30% of the profits as the return goes up, then our split can get a little bit higher than that.  But generally, our investors always get the majority of the profits, and they always get paid first. So, this isn't a big cash flow business for us. I know a lot of syndicators out there, who'll just have a profit split day one where every dollar that comes in some goes to the investors and some go to the sponsor. Ours doesn't work that way, the investors get a preferred return where they get all of the cash flow until they've received a threshold return and then we start to share. So, we keep the lights on here by doing house flips and having other multiple streams of income. For example, us building homes here in our community and the fire damage lots is another source of income and we have a lending company which is another source of income.  Occasionally we sell our multifamily properties and that's when we get paid. We get a payday, not a paycheck. It's not quite as lucrative as many people would think, but eventually, you get there and profit potential is enormous but you never realized that until you start performing for your investors. Don: Okay, so let's talk about the way that you structure your deals with your investors. So, they're getting a preferred return. I guess it's 8% right that's the classic return that they get? Brian: Yeah, ours is 8% general. Don: 8% and then that's going to be a preferred return which means they get that right away as they invested the funds or a little bit after right it could be two or three months after, right? Brian: It doesn't mean anything, they may never receive it. If the dealer loses money and never makes money from day one, they never see a dime. But the way of preferred return works is that the investors get 100% of the cash flow until they've reached that threshold return and that's a cumulative return. So, if you invest today, in the first year, the deal throws off no cash flow, you get no cash flow. But if the second year it throws off 4% you get 4%. In the third year, throws off 8% you get 8%. In the fourth year it throws off 12%, you get all 12 because we still owe you 4% from year two and 8% from year one. So, if for two more years after that it still produces 12%, those two years, you're still getting 12% that makes up the 8% from the first year. And then after that, dropped to 8%, we'd start splitting the difference of what goes over 8%.  So, a preferred return is often confused with a dividend and it's they're not the same. A preferred return just means that you're first in line for all cash flow until you receive your hurdle rate. It doesn't mean that you're going to get distributions right away equal to the preferred return. It just depends on what the property is throwing off cash flow wise. Don: Yes, thank you for clarifying that. Now, I know the investors are putting all the down payment and the capital expenses for repairing the properties and improving the properties. And so, they also get a share of the profits of the entire purchase. So, you're offering your investor 70% 30%? Brian: First, they get 100% until you reach that 8%. So, if they haven't been distributed the full 8% through cash flow during the ownership period, then that's where you catch it up. As you take your sales proceeds, you catch up on your preferred return first. After your preferred return is fully caught up, then any sales proceeds remaining after that are split according to whatever the waterfall is. And if it's 70-30, 70% goes to the investor 30% goes to the sponsor. In our case, we have a couple of different hurdle thresholds where it's 70-30, typically to a 12. And then after a 12% return, anything that goes above a 12% return is then split 60-40. And anything that goes above a 15% return if you actually can ever get above a 15% return, if we do then whatever a little amount goes over would be split 50-50. That's the way at least three quarters to 80% of our deals are structured that way and of course, every once in a while there are slight variations on that theme. Don: So, at the end of the entire purchase in the cycle of purchasing a property, renovating the property, stabilizing it, and then you refinancing the properties or you're selling them? Brian: If we're going to hold over three years we like to refinance and return capital to investors. But if we can sell, we will. I always like to say that we're a buy and watch investor, we don't necessarily buy to flip and we don't necessarily buy to hold. What we do is we buy the asset we watch, we improve the asset, and we watch the market for the most optimal exit point. And generally speaking, the most optimal time to exit is going to be right around year two and a half, two year three and a half, right around that point after you've fixed up units and fixed up the outside, you've increased the income, you've pumped the value.  That's the inflection point where now the business plan would switch from things we physically do to just simply relying on the market for anything additional after that point. And when we reached that inflection point, that's usually when we like to sell. But if the market isn't cooperating and we don't think it's the right time to sell then we won’t sell. We can refinance, return some capital investors, sit on it for another year or two or three until the market is ripe for a sale, and then we could sell at that point. Don: What would you say you're typically improving the property like as far as the value goes? So, let's say you purchase a property for 10 million. After all the renovations and after improving the property, what would you say, percentage-wise, is the new value that you guys can bring the property to? Brian: On stabilization, we're looking for at least a 20% lift that includes, over and above the renovation. So, if we bought a property for 10 million, and then we put 2 million into it, or 12, then you'd be looking for somewhere around a $2.4 million increase. So, you'd be like 14.5, maybe 15 million to exit. So, we're looking for the kind of like that 20% or more lift within that stabilize period. Don: Of course, we got 2.4 million in profit, 30% of that is going to go to the sponsor or is considered profit for the sponsor after the deal is completed, right? Brian: First, you have to catch up with your 8% preferred return. So, let's say you distributed no cash flow during that period. For example, let's say it was a real deep value add and wasn't throwing off any cash. Now the first thing you'd have to do is give 100% of it to your investors until they got an 8% return. If it was three years' worth of time, then that's 8% times three. That goes off first, and then after that, whatever cash is left is what goes into the split here. Don: So, assuming you were cash flowing, and you managed to pay the preferred return during the entire process, and they always got the 8%, right? Hypothetically speaking, so you would be making 30%. Brian: That's right Don: Of the amount that you generated, which is 2.4 million in case of buying a property for around 10 million. Brian: And yeah, so you're looking at maybe $750,000. Could be your potential payday for the value created. That's right. Don: Yeah. So, it's just a matter of being able to get into a few deals like that every year, and then the profit as a sponsor, right as an indicator, the product It is down the line, a few years down the road. Brian: Yeah, that's exactly it. Like I said investors want to see their sponsor is getting a payday, not a paycheck. If you perform for them, then you do well. And if you don't perform for them, then you don't do so well. So certainly assuming you did your job right, the profit potential is pretty substantial. Don: But, something Robert Kiyosaki changed my life twice. Once was when he wrote 'Rich Dad, Poor Dad.' We all did read this book and got influenced by it. And if you didn't, then you should, because it's like I would consider that the Bible for real estate investing and investing in general. The second time he changed my life was actually when he wrote his book 'Fake,' which he talks about how money is not real and how money is a depreciating asset and why you should never have it, why you should never hold any money. And that's so true when you are trying to get wealthy and I think it's something you understand once you've made some money in your life because you realize that it's not real. But the things that money can buy, it just pays the bills. But if you try to get rich, then the only way to do that is to equity, which is what you're doing right? Brian: That's exactly right. Don: I think once this light bulb goes off and you get that principle, then you're okay with putting all the work and assembling a deal and improving the deal and stabilizing these properties that you're buying, just so you can get wealthier down the road. Because in theory, you are already wealthier because you have equity in the property. So, it doesn't matter. Brian: Yeah, you've got the equity and assuming that the market doesn't turn against you and take the equity back from you, that's happened before too. You saw what happened in 2005 through 2007. Equity is fleeting, so it's 100% true, everything you just said. But there is something to be said for keeping some cash for a rainy day and always having reserves and kind of living a little bit of a low leverage lifestyle. The people with the most leverage were the ones that got hurt the most. And it's funny when you live through an economic downturn like I have and managed to survive it, you see the risk that leverage ads and so you have to strike a good balance and you want equity and you want to use debt smartly to help improve your position.  But at the same time, you don't want to over-leverage and you want to keep a safety net. You get it, you guys have built your business completely with equity without debt here so far and seeing what that's enabled you to do. And now you can use debt smartly, to help grow your portfolio. And I think everybody needs to watch that as an example of how to do it the right way, and the safe way. Don: Yeah, I think the main reason why we were able to pull this off was that we were making money in two streams, right. So, one stream was our business, our wholesale business, which created nice paychecks and nice paydays the way you call it before. And it's an accurate way to call it because when you make paydays, then you're able to buy properties and create wealth. And so that was the second way that we've created the portfolio that we own right now, through equity. The equity is the transactions that we made. We never live a lavish lifestyle. And it's different than most people here, Miami because, I don't know if you've been here but if you drive in the streets here, then you're going to see a Ferrari or a Lambo everyday second turn. And that's a lifestyle in Miami.  Being a successful investor here in South Florida, we were able to resist that temptation, to invest the money where it should be parked, which is, in my opinion, real estate and stocks and property and equity. There's a beautiful saying that affected me tremendously, "Rich people are busy making money while poor people are busy showing off money that they don't have." Brian: Right. Yeah, you could certainly see a lot of evidence of that around, that's for sure. Don: Definitely. And especially today with social media, everybody's trying to show off, everybody's trying to faking it till they're making it. You're not going to make it, you're going to blow your first 10K on a Rolex. You should be blowing it on education. That's not even blowing it, that's investing and that's the difference, right? So that's what I think like an investor as I'm growing. Of course, I still have a lot to learn and I interview people like you, people that have made it bigger than me, the people that come to the show they have the same perspectives and the same lifestyle as well. Brian: It's just a matter of prioritizing and realizing that the first thing you've got to do is invest for your future. And it's like I spent almost every dime I had investing in more real estate and more real estate. And so, it's enabled me to accumulate a fairly large portfolio of rental homes just for my own, basically, my retirement plan. I don't get any cash flow off of them because I had them all financed on 15-year loans. So that way, they'll be completely paid off when I'm ready to step back and slow down. And it's a sacrifice now because if the property needs to be repaired, I'm probably pulling that repair out of my pocket and kind of negative cash flow, but I look at it as like a deposit into that savings account, right? And then eventually I'm going to have 40 or some rental units that will be completely paid for and cash flowing for me with no debt and right at the time, I would need it the most. So, it's sacrifice now, but it's a payoff later. Don: Definitely. So, let's talk about the future that a bit since we're already talking about it. What would your thoughts on the multi-family market right now and where it's going because I know it's a little bit overheated, a lot of people want to buy multifamily? And I know people buying properties for five and a half cap rate, which is pretty expensive in my opinion. What do you think about the market and where it's going? Brian: Yeah, you're right, the cap rates are low. And we're buying stuff at five and a half and six caps too. So, I get it, it's where the market is right now. And certainly, real estate is desirable, but it's desirable for a reason. And then, the reason is supported by fundamentals. And that's why pricing is so high right now. And one of the most common questions I get is, what inning are we in and everybody wants me to say that we're in the eighth or ninth inning and this is all going to change soon there's going to be a big downturn, you're going to be able to come in and scoop up properties at a big discount. I just don't believe any of that's about to happen, and doesn't matter what anymore because anybody knows that a game can go into overtime and a game can be rained out early, and can't just say that every game nine innings.  So, we're not at the bottom of the cycle. And if we are at the top, what does the top look like? I think that a top when we reach one if we haven't already, it just looks like a plateau in pricing where we take a pause and the economy catches up to where we are and valuations are still fully supported with incomes right now, even where they stand today. So, I don't think there's going to be a big downturn or a big buying opportunity anytime soon like some people are holding off for. When that does happen, maybe prices have gone up another 20% then they fall 10%. And if they would have got in today, they would have made 10%. But instead, they're going to buy them and gain nothing. So, we're still buying and I think one of my defense mechanisms is to buy in strong markets that have population growth, job growth, and income growth and that gives me a hedge against the downside. I think it's important to do that. It's tough out there. We have to look at about a thousand deals to buy one. Don: It looks like a shiny market. Everything's growing. The population is growing. The jobs are growing and so yeah, everybody would probably want to buy it there. But we're already talking about that, what would you say that market is? Where are you looking right now for properties? Brian: We're looking in Phoenix, Arizona, Las Vegas, Nevada, Atlanta, Georgia, northern and central Florida, specifically Tampa, Orlando, North Carolina, such as the Research Triangle market, Charlotte, a little bit here and there of Texas. But I think Texas is way overbought. So, we're kind of scaling back in Texas. We still own there, but we're net sellers in Texas. I love to find something in Nashville, but there's very little product coming out of that area. So primarily, I think, Arizona and Nevada, Georgia and Florida are primary markets. Don: So, you're looking at a lot of markets, and how do you analyze all the deals that are coming your way? I guess you got to have some help, right? Brian: Yeah, we've got a fairly robust team here. I've got two other guys on the acquisition side and one analyst. So, we've, every time a new opportunity comes to us, my chief investment officer will do a quick prescreen. If it passes a certain series of tests, it goes to our analysts to build a financial model. And then it goes back to our chief investment officer or our CFO who is like a co-Chief Investment Officer. And then they review the deal and tour it and talk to the brokers and run the comps and tour the comps and do all those other tasks. Our businesses grown pretty substantially, we're vertically integrated. So, we have our own management company and we manage our assets, which means we have employees on the ground, in all the areas where we operate.  So for example, we toured a couple of assets the other day, and it just turns out that we had our manager go with our acquisitions guy and manager knows the manager of one of the properties because they used to work together at one of our properties actually, and so, we have kind of a little bit of good rapport there and can learn more about the property because those relationships. So, we've well ingrained in the markets that we're in, we have people on the ground and the markets that we're in, and we have full control over the whole process. So I'm lucky that between me and my CIO, my CFO and the CEO of my property management company, between the four of us, we have 100,000 units of multifamily experience going back as long as 40 years and it gives us a good leg up on being able to stay on top of the markets in the assets. Don: That's not something you can easily find as an investor or a passive investor who's looking to invest with a sponsor. I mean, your team sounds very professional and experienced and you guys are exploring many markets and have years of experience. So, if I was looking to invest as a limited partner, I would give you guys a call. And speaking of which, if anybody wants to connect with you and get to know a little bit more about what you're doing and your projects and your future deals, what would be the best way to do that Brian: Probably the best way to reach us is through our website. Which is PRAXCAP.COM or a company's Praxis Capital and our website is P R A X C A P. C O M and on there, there are contact forms and you can fill out and our senior vice president and investor relations will set up phone calls. And we'll get to know you and establish your relationship before we start talking about deals. That's probably the best way. You can also find me on biggerpockets.com which is a real estate forum website where people ask questions and get answers about all kinds of real estate topics. I'm pretty active there and love to answer people's questions on that website when they post in the forum. So those are probably the best two ways. Don: All right, Brian, awesome. Thank you so much for that. And thank you so much for the insights that you gave us today. And of course, most importantly, time is the most valuable asset and therefore I want to thank you for investing the time to come to the show today. We appreciate it. I hope you're going to have a great day. Brian: Thanks, Don. I appreciate you having me on the show. I had a great time and humbled and appreciative to be a part of it. Thank you for having me on. Don: You're welcome. Thank you very much, Brian. Brian: Sure thing. Lady: Thanks for listening to the real estate investing podcast with Don and Eden. Stay tuned for more episodes. Till next time!

James: Hey, audience and listeners, this is James Kandasamy from Achieve Wealth Podcast where we focus a lot on value-add, commercial real estate investing and we usually talk to commercial real estate operators who have been very active buying deals nowadays.  Today, I have Brian Murray. So if you have not heard about Brian Murray, he's the author of the best-selling and award-winning book: Crushing It in Apartments and Commercial Real Estate. And he owns almost 700 units right now on his own and I think out of 700, 600 of it is apartments and 100 units are on office sites. Hey, Brian, welcome to the show.  Brian: I'm really happy to be here, James. Thanks for having me. James: Really happy to have you here. And so tell me about, how did you go from 0 to 600 multifamily 0 to 700 asset classes on your own without syndication?   Brian: Yeah, well, you know, I started 12 years ago and I'm located in Upstate New York. That's quite a bit different market than New York City. But my first property was an office building and it was a distressed office building and from that very first deal, I did a lot of value-adds. Frankly, I really didn't know what I was doing, I was kind of figuring stuff out as I went along but I progressively made that property perform better over a couple of years and added a ton of value. On that deal, I assumed the mortgage and on my second deal, I did an owner/finance situation. It was another property that was half full, I filled it up and refinanced out of both of those and bought three more properties and followed that path the entire way. Which is find well-located properties that were not well managed or had some other large value-add component, exercise that value add and then refinance, take cash out and buy more properties. And that's the exact path that I followed to get to where I'm at today. James: That's crazy, which is good. I mean, that's the model that, I mean, it's an absolute value-add model, which is basically the theme of this podcast. And so did you buy and then improve it and then refinance the money out or did you sell it and I didn't get that far, can you clarify that? Brian: Yeah. So I refinance the money out. I am primarily buying hold, still to this day. But especially in the first 10 years, I think I sold one or two properties, smaller properties, for the most part, during that time. I am selling some of my smaller properties right now to redeploy those funds into larger properties, but my strategy has really been buying hold. James: Awesome. Awesome. So before we go further, I want to clarify about your book, Crushing It. I mean, I remember asking this question to you when we met face-to-face. So did Gary take the 'Crushing' name from you or you took it from him? Which one is that?  Brian: You know, so his book, Crushing It, came out about a year after mine but he launched a book called Crush It prior to when mine came out. But he took the Crushing It and you know, but that's fine. It doesn't matter. It's all good.  James: Well, it must be a good name because both of you are like a best seller, you know, in your own domain. So awesome. So right now what's your plan? I mean you own this many units on your own and what's your plan right now?  Brian: So right now, I'm really focused on diversifying. I was really excited to do my first Mastermind, which was last year, which is how you and I met and I met some great people at that Mastermind and highly recommend that to other people; surround yourself with other folks that are doing what you're doing. But when I went off to this Mastermind, it was really eye-opening for me because pretty much everybody there was doing syndication and it was a model that was really new for me and I just learned a ton about what people were doing.  And my model has worked great for me up to this point, but I've reached a size, we're growing purely organically. It's becoming more challenging to maintain that pace of growth. I think also with valuations at a higher point, it's more and more challenging each year to pull that much value-add out with refis. I think another factor that's come into play is I've been very, very dedicated to putting every dollar that I've earned back into my real estate. That's been a been a big part of how I've done what I've done is to continuously reinvest back in. As a result of that, to this point, I've been living fairly frugally and you know at a certain point, you want to not have to put every dollar back in but you know, to maintain that growth rate, I've got to look at other options. I also want to diversify geographically because most of my properties are in one location. And so I'm in the middle of my first syndication right now and I've met so many good people that now, I'm developing partners and looking at new markets and it's very exciting for me. I love to learn, I love to try new things and getting into these other markets and, you know, meeting accomplished people like yourself, it's very motivating. So I'm just super excited about it.  James: Yeah, it's eye-opening when you go and talk to different people who are doing the same level as you are doing much more higher level because you can see a lot of different thought processes and how people do things. So why are you moving towards syndication? I mean, you own like so many units on your own, can you go into a bit more detail on why do you think syndication is going to be beneficial for you right now in this market cycle as well or on your investment side?  Brian: Well, you know syndication, it does open up a lot more opportunities in terms of size. So for example, right now, I'm looking very closely at an apartment complex that's approximately 300 units. It's in a market that's new for me that I've been doing a lot of research on and that would be a real challenge to try to pull off on my own. It really wouldn't be possible right now. So the property that I've purchased strictly on my own, without raising any outside money, I did last year, it was 126 units and you know to try to purchase something that's 300 plus units that wouldn't be possible for me right now. So it's pretty exciting and I think another thing is I really enjoy working with the idea of doing some projects with partners and getting into some of these new markets. So, there's another piece of it that's kind of exciting is, I've reached a point where I've done pretty well for myself and the idea of helping other investors who want to put their money to work to achieve their goals, I think that's going to be rewarding too. That if a project does really well that, it's all those limited partners that come in that can then improve their lives through their investment as well. And if I can be a part of that, I think I'll find that very rewarding.  James: Okay, that's awesome. So scalability is important and you think of helping others as well to make money, especially I think other investors or other GPs who needs your skills, I would say? Brian:  Yeah, absolutely. Yeah, and that's one of the things that's great too is I've found that it's meeting these other people that are doing it, I've got a different experience. So just like I'm learning from people like you, I'm finding that partners I can bring some different perspectives and value to the table as well. So you always want to partner with people that have strengths in areas that are different from you and that's what makes a strong team. James: Absolutely, especially in commercial real estate because the number of knobs that you can tune, there are so many knobs and especially like in multifamily because it's very management intensive compared to the triple net, other commercial properties. Multi-family is very management intensive and it gives a lot of ways to make more money or to scale down or to scale up. Even though you'd be really, really skilled at that but it just gives you a lot more opportunity. And the lease is one year term or six months term; you can quickly raise or reduce rents, it gives you a lot more fungibility, I would say. I mean, you have like SAS, we talked, in the beginning. You have like 600 units multifamily and 100 office space? Brian: Yes.  James: So can we go a bit more detail into the office? What kind of office is it and how did you strategically balance within the 600 and 100 office? Is it optimistic or what did you see and why did you do it?  Brian: So I started off with the office and actually, my second property was retail and so, starting on that commercial side was really interesting. I think one of the things that did for me is really emphasized my focus on customer service and customer care with tenants. And when I tried my first multifamily, I think that there were differences but they're also a lot of similarities. So the value-added approach that I was taking to office retail worked just as well with multifamily. And our focus on really taking care of our tenants as our customers really served us really well in that area also. Over time, as recently as two or three years ago, we had reached a point where up to that point we had more office and Retail and then about two years ago, I would say, we were 50/50 and now we're closer to two thirds, maybe even 70% multifamily with the rest commercial in terms of the makeup of our portfolio. So as time went by, we've really gravitated toward multifamily and that's our 100% focus right now. I think the biggest thing is that there's a number of things we like about multi-family. From our experience with commercial, you've always got a little bit more risk because you tend to have, not always, but you often will have tenants that comprise a disproportionately large percentage of your income and that can leave you really vulnerable if somebody leaves. So, on more than one occasion, we've had a commercial property where someone that takes up more than half of the space in that property, leaves unexpectedly. And then you've got with one tenant leaving, you have a property that is negative cash flow. And if you don't have a portfolio in place to support that, that can be devastating and it's really not fun even if you have a portfolio to perform it. And then when you go to backfill that space, it's more challenging in commercial properties because you oftentimes have to find the exact right tenant for that space, for that location, for the tenant mix and the property, for the configuration of the floor plan. There's a lot of things that you know, different commercial tenants are looking for.  If you just adjust the rents up and down or maybe offer some concessions, a lot of times, the market doesn't immediately react to that. So turning that dial like you do in multifamily, you have less control. So if you're looking for a particular type of commercial tenant, it could be, it's not unusual for us to sit on a vacant space for one two or more years before the right tenant comes along and fits in and takes that space. With multifamily, you've got those dials that you can turn and say, Hey, you know, we're going to run a special. We're going to bump rents, we're going to drop rents and you usually will see a pretty quick reaction from the market to the changes that you make and from my perspective, that's better.  You always want to have more control and the ability to adjust with your market, adjust to combat your competition and different things like that. And frankly, we've enjoyed working with the tenants. I think there's a perception out there that a lot of people would love to invest in commercial because they think they have this idea that working with white collar tenants would be much better, wouldn't have the problems but in our experience, they can be more challenging. They can be more demanding and sometimes even unreasonable with what they're looking for and you don't usually find that as much with the residential tenants in multifamily. We do primarily workforce housing and the people that we deal with there, tend to be good down to earth people and reasonable. So we appreciate that.  James: And when you talk about office, this is the normal office tenants, I guess?  Brian: Yeah full-spectrum, mostly professional tenants. We've got plenty of medical tenants. We have lawyers, accountants, all types, we've got not-for-profit offices, engineers and architects that would pretty much any type of white-collar professionals. James: Got it. That's very interesting. So when was the aha moment that, hey, I should do multifamily because you are focusing a lot on office, what was that triggering moment where you say, okay, I may need to look at this multi-family? Brian:  Well, I don't know if there was a specific moment. I think it happened gradually over time. When we had about 50/50 multifamily and Commercial, I think one of the big things was watching the performance of the two halves of the portfolio and seeing which half was performing better and part of it had to do with the types of value-add projects we were finding and I thought we were better able to execute on the value-adds on the multifamily side. And that portion of our portfolio just kept outperforming the commercial side and I just saw in the market that we're in, more opportunity there and I felt like it was more stable income based. So, I think I think it just happened gradually over time and you kind of tend to slowly move in the direction that's performing well and where the needs are in your Marketplace. James:  Got it. So all the deals that you have done on multifamily, how did you choose? I mean all these deals are in Upstate, New York, is that right? Brian: Yes. James: So you may not choose the city because that's where you live, the area. But how did you select the submarket? Okay, this deal is good in this submarket, what are the parameters that you looked at When you look at a deal in multi-family? Brian: So, we have a really close familiarity with the subtleties of the market and so it's fairly nuanced like there's not one overarching thing. One of the primary drivers of the market where we are is not that far away is a fairly large military base. And so one of the factors that we look at is, well, we definitely welcome military tenants, we have shied away from the properties that are closer to the military base and tend to have a really high percentage of military population. That's just because there's so much turnover, lenders are less excited about lending those properties because they know that long-term, there could be downsizing. A base could close, there's exposure with that. So we have gravitated within our region to the areas that are maybe we will have some military but not be all military and into the communities where people want to live, in the parts of the city that we feel are strong and good safe locations and convenient locations for the major employers in the area. James: Got it. Got it. And on average right now, what is the price per door in that market? Because I never talk to anybody from New York who's buying multifamily. I mean, Upstate, New York,  New York City, but in general, can you give us some guideline on price per door? What cap rated stabilize deals are being bought right now? Brian: Yes, absolutely. So it's a really, really wide range. So that's what I would say at first. The most recent stabilized property that we purchased we paid about 60,000 a door. There are properties selling in the area, 80,000 plus per door, not that often but a lot of the properties we've got, we've purchased a couple of decent sized properties at auction. We've purchased a lot of distressed properties.  The 126 units that we purchased last year, we paid in the 40s per door and that's pretty low for this area actually, but also the occupancy was below 60% when we bought it and it had a lot of deferred maintenance. So I do feel like we got a fair deal and a good deal on that because there was so much upside but there was a reason that it was priced that low. And so you can come along properties in this area that have low price point sometimes even down into the 30s per door, but usually, there's a reason why they might be in severe distress. But for stabilized properties, I think you're mostly looking at maybe 50 to 70 a door.  James: Okay. You also mentioned that you're looking at other markets now?  Brian: Yes. James: And why is that and what're your criteria to look for in other markets?  Brian: So the number one reason is really a risk management type of approach. Where anybody who's come in and taken a close look at our business and one point even a few years back, I had some graduate students come in and they analyzed it and everybody said, hey, you're kind of crazy. You've got all your properties concentrated right here in this one city and now they're all within maybe half an hour drive of that City and there's a lot of risks involved to that.   So if that City that I focused on starts to decline or say that military base that's not that far away, if they downsize then that all affects my portfolio. So I've known for a long time that it would be wise to diversify geographically and it's time to do that. Another factor is frankly, this is not a huge City. It's not a big area that I'm in and we've got limited opportunities for growth here. There's a limited number of properties that come onto the market and realistically, it's time for us to look to other places. So it's a variety of things. James: So let's say you're looking at a new city, a city A and a city B, what do you look for in that city that you think is going to be appealing to you?  Brian: Well, I think there's a variety of different factors. Probably the number one thing that makes the city appealing is job growth, job creation. Being located in Upstate New York, it's not a strong area for job growth. There are pros and cons to being in a market that's undesirable. So I have less competition. I can buy things at much higher cap rates and I can get properties to cash flow better if I have less competition and higher cap rates. So, there's sometimes you can look at it and say, hey, if you're in a market that's less desirable, sometimes you're getting properties at a great deal and there's something to be said for that. But as I look to new markets, I'm trying to find something where cap rates haven't dropped too far and you can get a reasonable return but you've got that benefit of healthy growth in population and jobs. But I think because I'm looking for more geographic to looking for a market that's going to show more stability, it's on an uptrend and just like any other place, no matter what market I'm looking at, I've realized over time just how critical the specific location with any city is.  So almost any City has their good parts and the bad parts and so you could take any market that you choose and break it down into all different, more and less appealing locations. And so, I wouldn't just throw and say, hey, this one city is great, even though the population is growing and you and I talked about a property not that long ago that you are familiar with the location and you very wisely were like, oh, that's not the right deal. It might be a good city, but that's not the right part of the city. James: Correct. So, I mean, you are sitting in Upstate New York, you looked at the entire nation. Can you give us the top three cities that you think that you want to delve in?   James: Brian, so you are sitting in Upstate New York, and you looked at the entire nation, you know how multifamily works because you own 600 on your own. So you just briefly outline what are the things that you look for in a city. So can you name like top three cities that you think that you want to be involved in that you think has a strong growth story?  Brian: Well, it's a work in progress for sure. And what I would say is sort of the candidates that I've narrowed it down to the commonality would be they tend to be the places that people are migrating to and being in Upstate New York where a lot of people are leaving the area, I want to look toward the places they're going.           And so, primarily in the Southeast, pretty much our candidates or everything from starting in probably North Carolina going down to Florida and you know all the way over to maybe the little bit in Texas, but I think Georgia is an interesting market that a lot of people are pursuing. I'm partnering on a project in Kentucky right now and we're looking at North Carolina and there are some very attractive markets in Florida as well.  James: Got it. Got it. Got it. Before I want to go into the deal level analysis that you do, I want to quickly ask this question because you know, it's very unique to you because you had your own deals and now you're going into syndication, right? So what do you think are the skills needed from yourself when you are having your own deals, where you can skip a distribution or whatever happened to the deal is your own problem. So now you're going into syndication, where it involves a lot more people. What do you think is a few skills that syndicators need to be successful in syndication? Brian: Sure. I mean I would say start a start with one of the big ones which is something that I don't have, which is an investor base and that's a whole job unto itself. Over the years doing what I've been doing and getting some acknowledgments for that, I had a lot of people approach me over the years and say, hey, you know, can I invest and I never took them up on that and now I'm doing that. But what I've realized is in getting to know all these folks that are out there that there's a lot of people who are interested in partnering with me who already have those investor bases and have that skill set of managing those investors and taking care of all aspects of that.  So at this point, I'm primarily thinking that I bring more value in the weighing on the underwriting and the property and identifying all the value-add opportunities and making sure that people look at it as more than a spreadsheet because there's so much more. I toured a property last week and was able to uncover quite a few things. The broker that was there. I was one of the last people, they had about 40 tours and I came through and identified some significant value-add opportunities that the broker said no one else picked up on. And I think that that's something I didn't discuss but we've managed all of our own properties that whole time and so, the knowledge that you get from that just brings so much better of analysis to a deal to make sure you're vetting it properly, you're not overpaying, you're also not underpaying and that there might be value there that you're not realizing. That some of the assumptions that you're making for rent growth are real and can actually be feasible for implementation. And so, you know, those are some of the things that I bring and the experience and having the portfolio I have may give lenders a lot of comfort. And so, I'm recognizing that, hey, I could focus on my strengths and bring some things to a partnership and take those areas that I don't have and other people might and partner up. So if someone's going to do it on their own, they've got to have a pretty broad skill set and that's a challenge, to have the operational knowledge and bring that side and also have the people skills and the investor relationships, it's not easy. I have a lot of respect for people that are doing it all. James: Absolutely. So you are two operators, where you underwrite deals, you understand the operation and you're doing your own asset management. You're missing the investor base creation side of it, which I think you are either partnering or slowly building that up so which is awesome. For me, the operators are at the top of the food chain because they are the backbone of the whole deal. They know what's happening in terms of the rents, how many percents of rent increase is happening on each unit? How many units are being turned? What is the make ready period, what's the delinquency? What is the idling unit period? That's a lot of parameters in the multi-family operation which can be optimized and if you know that very well, your underwriting can be very, very solid, I would say.  Brian: And I think you also bring a reality check. I think that the folks that are operating in the syndication space that don't have as much operating experience, it's easy to look at numbers and assumptions in a spreadsheet and it's challenging to actually recognize what that means in terms of the actual human beings who are there living in the apartments, what it means for the contractors and the property managers and whether what you're assuming is even practical. I look at a spreadsheet and I'm looking at it realizing, hey, you know, I looked at it once a day and I told somebody I'm like, do you understand how much drama will be involved in this? So if you haven't done that you don't know. And sometimes that translates into you might need to maybe tone back your rent growth or you might need to say, hey, maybe we implement something like this over time so that we don't have an all-out rebellion on our hands. So, you know, it's a challenge to bring all those things to the table. James: Yeah, I've seen people who come to me, you know, first few deals and say, oh, this is all bills paid, I'm just going to change it to tenant pay bills. I say, well, that's easy. We can see the value. Well, you do not know how much drama you're going to have there and you might not able to do that on a specific property, a specific location. And they say they want to do them; Utility Bill back, they want to increase the rent, they want to charge covered parking, they want to do laundry increase. So many things they want to do at the same time and I can tell you, they don't have the experience actually. But the thing is, a lot of people have been making money even without all the skills. And I always tell them everybody's a champion in a bull market.  Brian: Exactly, yes. A rising tide lifts all ships, right?  James: Correct. So, people may not look at that skill more in detail or give due consideration to that type of skills where the operation is important, but I think it's important if you want to sustain good rent growth across different market cycles. So coming back to underwriting. So right now you are looking at deals, how many percents of deals do you reject immediately by just looking at it?  Brian: Wow, I would say well over 90%.  James: Okay. So the 10% that you have or what do you look for in that 10%? What do you do? What are the steps that you take to look at that 10%? Brian: You know, I think the very, very first thing I do is I look at the T12. I want to start my analysis of a property by looking at actuals. And then I'm going to base the current situation and the actuals, going to kind of weigh that against my own experience. So, how does the target asking price or the whisper price or whatever they have, how does that compare to the actuals?           And then based on my experience looking through those actuals, what do I see that jumps out at me that might create value? And if you look down through and start looking at the comps and really piecing together this puzzle about, what opportunity is really here? Is the valuation based on something that's completely unrealistic? A lot of times, you'll recognize that some brokers are way better than others at doing a realistic model and pro forma and that's much appreciated. Because you see too many where they'll say, oh, you know, the labor is going to be whatever, $300 a door, and you know, hey, that's crazy. Like it should be 1100 a door or 1000 a door in that market and you know, you'll find out that well, it's been managed by the owner and they don't track the labor. But if you see that it's based on the labor is $2000 a door and you know, hey, we could get that to 900 realistically and still do a good job of maintaining that property, then you start to see an opportunity. It's a combination of running numbers and logical analysis based on experience, is really what I would say it boils down to. James: So in a new market, how would you determine payroll and [12:09unintelligible] on property taxes because this differs by market? Brian: Sure. So all those things are going to vary by market, although many of them will fall within a range. So you're going to say, well, in that market it's going to tend to be higher or lower and I will use my best judgment but if it passes a certain level of scrutiny, that's when you want to really get an established reputable local property manager involved who could look at it and say, okay, for this market specifically, these assumptions you've made are realistic or not realistic. The same thing goes with construction costs they could vary and I can look at it and say, I think that new flooring should be this much but hey, maybe in that market, flooring is much more expensive or maybe it's a lot cheaper. So, you know it's going to be within a certain range, but you just need to figure out how you need to tweak it to get to that market.  James: Got it Got it. Got it. I mean since you have your own property management in your own backyard and now I presume you looking at third partying your property management in this new market, is that correct?  Brian: That's correct.  James: So, what would you think is the most important factor to look at that third party property management company? Brian: Well, at this point, I would say yes, we're relying on third-party property managers. We may eventually consider expanding into new markets or operations, but not doing that right now and evaluating the property managers, it's been a very interesting process. I think you need to look at the full picture. I don't think there's any one thing you can look at. For a project that we're underwriting right now, in evaluating the various property managers, of course, we weigh referrals, you know, that's always good to hear referrals but I think one of the things that are appealing about the property manager that we ended up selecting for this project that we're pursuing is they actually specialize in this specific type of property that we're looking at. So, they have a track record and experience of nearly 10,000 units that are specifically C-Class properties that they've done value-add and executed those successfully. And a fair percentage of those are in the specific market that we're looking at and so there's a lot of things that just lined up. I think if I had to pick the one thing from my interaction with this firm because they toured the property with me as well, but I actually was very impressed with their analysis of our underwriting. They actually went through our assumptions and they toured the property on their own before I got there and gave us their own analysis and without us asking, they also toured the comps and gave us some feedback on that. I was impressed. You could tell that they went out of their way to look at the right things. They looked at the types of things that I would look at and they identified things and based on that write-up, I just said, hey, this is a firm that's experienced. They get it. They did a thorough job. They were professional, they were responsive and you know, it really checked a lot of boxes in terms of giving us an overall sense of comfort with the possibility of working with them. James: Awesome. Awesome. Let's go to a bit more on the value-add side because you have done a lot of value-adds because you buy refi and keep it more long-term. So what is the most valuable value-add multifamily from your experience?  Brian: I would say that the most valuable is it's different for almost every property. If I had to pick, you know, I think that sort of the Big Bang low-hanging fruit tends to be the, I'd say, clean paint landscape, kind of like the surface stuff. If a property is dirty and not well kept and then you make it clean and you put a fresh coat of paint and you landscape it, it can change the entire image of property of fairly modest cost and that can have a huge impact. The rent adjustment is sort of obvious, I think everybody looks at that. I guess big picture if the landlord is way undercharging, of course, you know, that's an obvious big easy one, but one thing that we've ended up doing in a number of cases that is less obvious that people almost never talk about is lowering rents. And in the 126 unit that I mentioned earlier, that's under distress, that's the first thing that we did is we went in and by our assessment, they were trying to charge too much which was a major factor in why the occupancy was so low.  So we immediately went in and cut all the rents and that might seem counterintuitive for a value-add person but over the last six months, we've raised the occupancy 25% and one of the big reasons is we lower the rents and so the net change in terms of the net operating income of that property it skyrocketed by lowering rents. So that also further demonstrates that it really varies, you kind of have to you know. It's sort of like if you look at five different people and say, you know, what change would you make in each person to improve their overall wellness? For some people, they might say stop smoking and some people might say, well, that one needs to eat better so you can't kind of really say well, what's the one thing overall?  James: How did you decide to lower the rent? What was the data that you looked at and decide, okay, I just need to reduce the rent here?  Brian: Well, you know, that's one of the fantastic things when you've got so many properties in one market. You know immediately that based on your other operations that something's off. You know when it's low, you know when it's high, you know when the fees don't match what's present in that market or the concessions don't match.  It becomes very simple. If you're going into a new market, you've got to study those comps and do the best you can and hopefully, tour those comps and do your own homework. But it's one of many advantages of having a concentration of properties in one area. In addition to all the many operational efficiencies that you can have is that you have that market specific knowledge that is there's no substitute for.  James: Got it. Got it. So when you decide to lower the rent, I mean it is a counter-intuitive but I think it makes sense in value-add, especially when you go with that kind of low occupancy. You need to do something to bring up the occupancy because once you bring up the occupancy, you can do a lot of other things. Brian: Exactly. James: You can't do it when the occupancy is low and you're adamant about pushing up the rent. So was your thought process, rather than I leave this unit vacant, that's the biggest loss compared to giving [19:48inaudible] $25 or $30 increase that doesn't make sense.  Brian: Yes. That's right. So, you know that's been one of the strategies that I've adhered to and has worked well; you lower the rents and lease it up and then you make improvements as you go and then you raise rents from there. Nothing more expensive than vacant space. The other piece of that which is an advantage of not syndicating is that I have been able in many cases to fund many of the improvements out of cash flow. So with this particular property, we did lower the rents, but the occupancy has been brought way up. So we've just crossed a threshold where now this property is cash flowing again and all that cash flow is going to be directed right back into making improvements, probably, for the next few years at least. And so, that's a perfect example of well, if you're going to syndicate and you need to pay investors, you really can't be investing all of your cash flow back into a property.  So what do you need to do? You need to raise some money up front to pay for those improvements and not count on cash flow so that you can achieve your investor returns and start to get them their money back.  James: Yeah. That's the one thing different with syndicated deal versus owning your own deals. You don't have to raise so much money so you can take your cash flow and just put it back. With a syndication [21:27crosstalk/inaudible] and you may lose deals because you're competing with somebody who has a lot of money versus somebody who is syndicating.  Brian: That's right. James: It's very interesting. So in terms of, I'm going to your personal side, is there a proud moment in your life or not in your life, toward your real estate career, that you think, I would remember that moment throughout my life until the end; can you describe that moment?  Brian: Oh, wow, you know there's been so many moments, but not all good.  James: No, no, the proudest moment where you think you really made a big impact on something.  Brian: I never really expected this but some of the proudest moments that I've had has been since my book came out and I would have never guessed that that would lead to that but some of the feedback that I've gotten from readers that they've shared with me that it's changed their lives that they started into investing and have already built portfolios. And to see the direct link between the book and people, you know, really making improvements in their lives has been extremely rewarding. So I think one of the great things is that I really went into the idea of writing the book just because I wanted to share what I've learned, the mistakes I've made and to help other people, but I never really thought that it would sell very many copies or that people would have that kind of effect and the fact that it did. When I get a letter, a note from somebody, it's been extremely rewarding. So now I kind of remember that I think that's been a big impact.  James: Yeah. It's interesting. I mean, I get a lot of notes from my books as well and sometimes you don't really take it seriously because for us it's just common knowledge from what we have learned. But some notes do make us think, oh, I really really made an impact on someone. I mean, it's mind-blowing in how many lives can be changed with the things that you share in a book.  Brian: Right, right. Yeah. Absolutely.  James: Yeah. So the next second question is why do you do what you're doing? Brian: Well. You know and it's interesting. I mean actually, in the book I share at one point, this was a few years back, I had somebody come up to me and they said you know, how much is enough? Like you are so greedy, why do you keep going? And I just realized that this person doesn't understand, they missed the whole point that it's just rewarding to take a property that's not performing, that's in distress, that's maybe even a bad thing in a community and to turn it around and make it a better place for people to live. You help the tenants and you help the community and to do that and start to get involved. Like I do meetups now and I met new people and threw those in the book to help other investors, and so, you know, I look forward to going to work every day. I enjoy it. I enjoy the challenge of finding and executing on properties that aren't achieving up to their potential and making a better place for people to live and more profitable at the same time. So I just think it's fun. Like I enjoy what I do.  James: Yeah, it's like a discovery, you're trying to discover these from your paper to the real stuff. Especially when you are underwriting because you're assuming a lot of things and how does that whole assumption become a reality? You know, it's very interesting to see the output of that become [25:42inaudible] people's lives, which is just... Brian: Absolutely. James: So we really had a really good knowledge box from you, Brian. So can you tell our listeners and audience how to get hold of you?  Brian: Sure, you know, your listeners can find me on Facebook. You can find me on LinkedIn, you know, you can find the book on amazon.com or on the book website is crushingit.info and my company's website is Washingtonstreetproperties.com  And if anybody is interested in reaching out, I'd be glad to hear from them.  James: Awesome, Brian. Thank you for coming and joining us. I think that's it. Thank you.  Brian: Thanks, James, was an honor.

James:  Hi listeners and audience, this is James Kandasamy from Achieve Wealth Through Value-add Real Estate Investing Podcast. Today, we have Brian Hamrick. Brian owns 370 units which 2/3 of it is syndicated, the remaining is owned by him. He's from Grand Rapids, Michigan. He does multifamily, self-storage and also non-performing notes and Brian is also the past president of Rental Properties Owner Association.  Hey, Brian, welcome to the show.  Brian: Hey, James, great to be here. Thanks for having me.  James: I'm really happy to have you here. I mean, you have been podcasting for the past three years. You have a really good audience because I remember after showing up on your podcast, a lot of people did contact me. So I'm sure a lot of people love your podcast as well.  Brian: That's fantastic. I'm glad to hear that.  James: Yes. So can we go a bit more detailed into what is this Rental Properties Owners Association, how do they add value to syndicators or landlords or tenants? Can you describe a bit more on that? Brian: Sure, the Rental Property Owners Association, which I'm a past president of, I'm currently on the executive committee and I sit on a number of different committees, they are a landlord representation organization.  So we also work a lot with Real Estate Investors and provide all kinds of training for both landlords and Real Estate Investors. Every year, we have an annual conference where we have National Speakers come in and talk about all different types of investing asset classes and whatnot. And really I got involved with it because when I moved here to Grand Rapids, 15 years ago, I was looking for a professional organization that I could become part of that would help me network with other professionals in the industry. People who own rental properties and knew how to profit from it and also just an organization that would help teach best practices so I could learn the ropes how to do it and certainly through the Rental Property Owners Association and the people I've met there, I've learned a lot.  We provide a lot of training but probably what I consider most important of all is we have a legislative committee that works with lawmakers, both local and at the state level, to help push through bills that help rental property owners and also help prevent bills from becoming a reality that would hurt us; anything that has to do with like rent control or some of those hot button issues that as landlords and rental property owners would like to avoid.  James: Yeah, very interesting. So like New York and I think, Oregon now is rent control states, if I'm not mistaken, so they probably have similar Association like yours in that city, I guess. Brian: I would hope so. It sounds like they're fighting a losing battle as you and I both know as rental property owners, you know, I believe you invest out of state, out of your area, is that correct?  James: No. No, I'm from Austin. I invest everything in Austin and San Antonio. Brian: Okay. So would you even consider investing in a city or a state that has rent control?  James: No. Of course not.  Brian: Yeah. It's really detrimental to the market and I think it's going to cause a lot of problems. I used to live in Santa Monica, California where they had rent control and you can see the negative results of that. James: Oh, Santa Monica in California, did they have rent control in the past?  Brian: Yeah, a lot of the Los Angeles counties, you know, it's kind of county by county, city by city, area by area, but there is rent control in Los Angeles in certain areas and you can just see how rental property owners, who own buildings in rent control areas, have no incentive to put money back into them. They're not putting the capital expenditures back into their property to keep them in good shape because there's no incentive to do so. They can't raise rents beyond a certain amount each year and you know, so why would you invest $100,000 back into your building if you're not going to get that out in value? James: Yeah. Yeah. It doesn't make sense for a business. So you may not run it as a business, you may be just run it as cash flow, I don't know, it's like a cash flow investment. I guess you don't have to spend any capital on it.  Brian: I can see how if you've owned the property for a long time and you bought it at the right price at the right time, you could probably be doing well with cash flow. But in these markets where you see a lot of rent control, they're expensive markets. So I'm not really sure once rent control is instituted in these markets what's going to incentivize new investors to come in and bring fresh money into the market. James: Interesting interesting. So coming back to your portfolio, can you tell me in terms of your holdings, how much is multifamily, how much is self-storage? How many percents of each one of these and how much is non-performing notes?  Brian: Sure. Sure. So multi-family is my bread and butter. I've been doing that since 2008. I moved to Grand Rapids in 2005 and 2008 the bubble burst, you know, we entered the Great Recession, it was a buyers' market. I bought my first 12 unit, I was using my own money in the beginning, started using other people's money and then started syndicating.  We currently have about 370 units here in the Grand Rapids area, Grand Rapids, Michigan and that's multi-family residential. In 2018 we purchased a self-storage facility, it's about 28,000 square foot, we're currently adding another 15,000 square foot to it and that's been a fantastic investment, I really love self-storage. And then, as you mentioned, I host a podcast - The Rental Property Owner and Real Estate Investor Podcast - and one of my guests over two years ago was a gentleman by the name of Gene Chandler and he was investing in non-performing notes and I really liked his strategy so much that I ended up investing well over 300,000 dollars with them and the results have just been fantastic.  James: So, you now do multifamily and now you're doing two other asset class. So can you tell me what does multifamily did not offer that these two other asset class offers? Brian: Well, I like you, I'm investing in my own backyard for when it comes to multifamily. Even though I've bought and sold over 450 units, in 2015, I stopped buying multifamily altogether because the values had gone to a point where I could no longer justify syndication. I couldn't get the returns that I needed for my investors to be able to to pay the prices that people were asking. The last two deals I found - one was off-market, one was kind of in between market - and I can go into details on that but anything that I saw after that point just, I was so spoiled by the prices I was getting between 2008-2014, that I started looking for other asset classes.  And there were probably about 3 years where I just sat on the fence, waiting to see if the market would change or something else would come along. And at some point, one of the people who I met through the podcast, brought me a self-storage deal that he had found off-market. I looked at it, I like the numbers. His underwriting was very conservative, but the numbers were very compelling and we ended up buying that in 2018. And just in one year of basically bringing the rents up to market value and switching to a virtual online web-based management system, we were able to add over $700,000 in value to that property. So I like the simplicity of managing and owning self-storage more so than multifamily because in multifamily, you have tenants and plumbing issues... James: So it's very Property Management intensive, right? Brian:  It definitely is and the self-storage, it's not. When you have turn-over, you're basically sweeping out a metal shed, you know, so it's a lot easier to manage and own and operate self-storage, especially when you're in a good market and I think we bought in an excellent market. It's just north of Lansing, Michigan. And then with the non-performing notes, I found a strategic partner who handled a lot of the nuts and bolts of that and I was able to invest with him somewhat passively so I enjoyed that aspect of investing there and the returns we were getting were very good.  James: Interesting. Yeah, I mean, as I mentioned in my book, commercial asset classes go in cycles. I mean, I know I'm a multi-family guy and your bread and butter is multifamily but if you find the right operators in other asset classes, you can make a lot more money or equal amount of money as what you're making with multi-family. So, would you think so? Brian: Absolutely. Finding the right strategic partners in other asset classes that's one of the things I set my mind to when I realize I'm just not seeing the returns I want to see in multifamily and apartments in my area where I'm comfortable investing. Now, have you looked at other asset classes? James: I did look at a few asset class. I mean the asset class that I looked at is also like, you know, self-storage or mobile home parks but it's also in demand. I'm surprised to see here that you found something in 2018 because I thought self-storage is a hot asset class as well, I will risk going after that. Brian: Yeah, it was a lucky strike and we've been looking for similar opportunities. But yeah, we're not finding them. What we're doing instead is building ground-up construction in self-storage, finding locations where the demographics are right and the need for more square footage of self-storage space is there and then we go in and fill that need. James: Yeah, but I'm happy that you are looking at multifamily is not like the only asset class throughout the whole real estate cycle. I mean you felt like in 2015, things picked up and you really can't find the prices that you want and you have changed strategy which is how an investor should be. You always want to look at what's available out there, the deal flow because the economy is still doing very well. There's a lot of capital out there and it's just harder to find a great really-making-sense deal. I wouldn't say deals, making sense deals in multi-family, something that makes sense. It's just so hard to find out nowadays. Brian: Absolutely. As an investor, you have to stay nimble and flexible and be open to other opportunities. Now, I know a lot of people in our field, our asset class of multifamily and apartments will find strategic partners outside of their area like in Texas or Georgia or wherever and partner with strategic partners who are able to find better value and better yields in their Investments. But I've had some bad experiences early on with some single-families that I owned out of state so I've always been very hesitant since then to own rental property, residential rental property, out of state. James: So you like to have any property within your own backyard, but you like to diversify within asset classes. Some people have one asset class, but they go across the nation. Like some people like to buy multi-family across the nation, wherever make sense but you are doing it the other way around. Brian: Yeah. Since I've branched out into self-storage and non-performing notes, I'm comfortable switching up asset classes. James: Awesome. So on self-storage, are you the operator, are you the primary guy?  Brian: No, my strategic partner is. He's the one who found the deal off-market, he negotiated it. I basically came in and raised the money; we syndicated that and raise the funds to be able to acquire it. James: Got it. Very interesting. And on the performing notes, you have a strategic partner, I would say, right? Brian: Yeah, I have a strategic partner on that. He's the one who knows that world. He's been doing it for well over six years now and really knows how to negotiate with the lender who we're purchasing a non-performing note from. He works with the homeowners to try to keep them in the home and figure out if that's even possible and then knows who the title company is that he should work with to get the right due diligence done and he's got the different scenarios in his head of how we can profit off of these notes. If we keep the homeowner in the home, what are the strategies there for us to maximize our profit or if we have to go through the foreclosure process. How do we go about that and maximize our returns in those cases as well. James: Interesting. Interesting. So if you get a multi-family deal today, would you still do it? Brian: If I found a deal that made sense and my underwriting shows that I could get the returns to my investors that they're accustomed to, I'd do it in a second, absolutely.  James: Okay. Okay. So let's talk about the market and submarket selection. So why did you move from California to Grand Rapids, Michigan?  Everybody's heading to Texas and Florida from California.  Brian: I'm from Michigan, originally. James: Oh, you're from Michigan? Okay, that makes a lot of sense.  Brian: Yeah, my wife is from here as well. So we met in California but decided okay, if we get married, start a family we didn't want to do it in Los Angeles, it's just too busy there.  James: Makes sense. Yeah, I mean just based on data that 50% of the population move to Texas And I think there's a lot more but Texas and Florida is the favorite destination for people from California. That's why I was asking the question. And how do you select the submarket in Grand Rapids, Michigan? Like how do you select which submarket to really do the deal? Brian:  Well eyes because I live here, I am looking within a half hour to an hour of where I live. Grand Rapids is very strong, has very strong demographics. It's one of the few Midwest cities that really bounce back strong from the Great Recession. A lot of diversified manufacturing industry. Furniture, Amway is here, we've got a lot of different industries and employment based here. So when I look at submarkets, I'm looking more at the neighborhoods, what's the crime rate in that neighborhood? What's the income level in that? What kind of rents can we command and by the way, I'll buy B properties and C properties or you know, C minus properties that we can push into that C plus B minus range. But I will avoid the The D areas and I've seen a lot of opportunities in the D areas. And by D, I mean where you have a lot higher crime rate, where you have a lot more evictions and tenant turnover and problems.  So I'm just very careful about and I work with the property management company that has a good grasp of these areas. So when we look at a property, we can really get a sense of if we buy this, is there an upside value, can we improve it and get higher rents, get better residents in here or is it going to be bound by the neighborhood it's in, that where it is now is what just where it's going to be? James:  Got it. Got it. Interesting. What about underwriting? I mean, when you look at a deal like I mean when you are buying multifamily, right? So how would you select the deal? Let's say a hundred deals been sent to you, do you know how many percents of it you would reject? Brian: Right now 100%. I'm not even looking right now, but what I'll do is I'll do a quick rule of thumb. Okay, what's the net operating income? What's the cap rate that they're asking? Is there upside potential? And of course, if it's listed by a broker, they'll always tell you the market the rents are way under market. you can raise the rent. No problem. That's sometimes true, sometimes not true.  But this area is so strong that any seller right now knows that they can get top dollar and while there's a lot of Institutions and out-of-state investors and even International investors who are willing to pay top dollar, the yields that they are willing to accept are much lower than what I'm willing to pay, which is why I'm not even looking at the moment.  James: Very interesting. Now I see it's happening across the country. I thought it was only happening in Texas and Florida but looks like across the country, that's what's happening. It's just so hard to find deals that used to make sense to us long time ago, right? So it's crazy out there.  Brian: Yeah, and it could just be that I'm spoiled because I was buying during a period when I could buy it at eight nine ten caps. And now, when I see things at five six, six and a half caps, I don't even want to consider them. But had I bought it at those cap rates between 2015 and 2017, I would have made a lot of money. So maybe I'm just a little too stringent in my criteria right now.  James: Yeah. That could be it as well.  Brian: Are you buying right now? James: Well, I mean, well, I'm still buying if I find the right deal. It's just so hard to find the deal that makes sense for my criteria, and I'm sure that's the same thing as your criteria. I'm still buying if I find the right deal but I'm not underwriting a hundred deals, you know, in one month. You know, whatever deal comes to me, I usually know that within the quick look, I know whether it makes sense for me to underwrite or not. And sometimes brokers will call me if they know that a certain deal is something that I would do. That's the only deal that I look at.  Brian: What's your quick back of the napkin way of determining whether or not you want to invest in something? James: If it's an email blast, I probably wouldn't look at it.  Brian: Yeah. Yeah, you kind of eliminate the ones that go out to everybody.  James: Yeah, it's already got everybody on his shop date and coming on an email blast. You know, you have to go on a best and final and best and best and final and then this ultimate best and final offer, which is you're shooting in the dark, right? You're basically bidding against yourself. [20:45 inaudible] I'm not really in a desperate mode to buy deals that go through that kind of process. So when I look for value-add if there's a true value-add deal, I mean, minus the crime rate area, I definitely know the area that has high crime rate, I can check it out quickly Class B and C, but need to have true value-add that we can go and add value. I don't really look at the entry cap rate, but I look for the spread of the cap rate from the time I buy to in the next two years kind of thing without any rent increases.  Brian: I think part of part of my problem, one of the reasons that I've just been on the fence is because we bought a value-add property back in 2015. It was an older building, built in 1920 and it was such an exhaustive process to go in and add value to that property. I was over there like every day. James: It is very tiring to do those value-add deals. To do deep value-adds, I would say.   Brian: Deep, deep value-add. And so my bandwidth for more opportunities was just completely limited because I was so exhausted by working on this one particular project. Now, luckily, we got it to a point where we added tremendous value to it and we're very proud of the work we did but you have to weigh the opportunity cost when you do those value-adds because sometimes they're so intensive that some of the lower hanging fruits, you bypassed that. James: Correct. Yeah. I see some syndicators doing deals every month and they're not doing a deep value-add or they're just doing the lighter value-add. Maybe they're just doing a yield play. [22:30inaudible] they can buy every month. They can claim 5,000 units or 3,000 years versus deep value-add to be like 100 and 200 and 300. It's a really really deep value-add. You probably make a lot more money than the guy who owns 3,000 to 4,000 units, but it's a lot of work.  Brian: It's more than just asset managing. You kind of become a de facto developer. James: Developer, a huge project manager. Yes, so many things but the deep value-add gives you a sense of accomplishment. Brian: It does.  I'm very proud of the work we did on this particular property and more so than any of my other properties because I didn't have to put nearly as much work into them.  James: Yeah, and the deep value-add it becomes a case study, right? Because it truly shows your skills to turn around property.  And people who have done deep value-add it's going to be easier for them to do the lighter [23:30inaudible]   Brian: Yeah, yeah, that's an excellent point.  James: So that's very interesting. So can you name like 2 or 3 secret sauces to your success? Brian: The two or three secret sauces to my success. I'm sorry if you hear that printer going in the background there.  James: It's okay. No worries.  Brian: Hopefully that ends soon. Secret sauces to my success; I think doing the underwriting, running my numbers. I always like to say, I like to see my numbers in bullet time. To see all the Matrix, you know, everything slows down and you can see it coming at you. I want to know what are the real expense is going to be after we've acquired the property. One particular mistake that I see a lot of investors making is they assume that the property tax is going to be the same as what the previous owner was paying and that's just not the case. So right there that's one of the main factors that I look at right away, is what is the property tax going to become once I buy this property and that eliminates 50% of the deals that I would even consider. So number one secret sauce is just really understanding the numbers. Not just where they are today, but where they will be once we acquire the property. Number two is having the right team. I am all about partnering with strategic partners who add value because they understand inside and out the asset class that you're investing in. The reason I was able to expand my multifamily portfolio was that I partnered with someone who owned his own property management company and managed the type of properties that I wanted to acquire. That without his assistance and without his team that really knew how to go in and do the due diligence and help me assess upfront, what are the capital expense costs going to be? What are the true costs going to be when we acquire this property? Without that, I would have made a lot of mistakes. The same with self-storage. I partnered with someone who even though he's young and new, somewhat new to the business, he had really studied it, talked to a lot of professionals, been mentored by people and really understood inside and out how we could add value to that self-storage facility. And everything that he put in his pro forma ended up becoming a reality. With my non-performing note partner, I mean he knows that world inside and out. So when we acquire a note, the first 12 that I bought with him, we only had one that we lost money on and that was about $1,700.  James: Out of how many notes?  Brian: We bought 12 notes to start with because I like to test before I bring other investors in so I bought 12 notes with my partner, I JV with him. Five of the notes our average return was over 80%.  James: Wow. What timeline? Brian: A year and a half.  Well, actually, each note is kind of on its own timeline. So I'll tell you that of the twelve notes that he and I purchased together, five of them are closed and paid off like we've made our profit. Our average return on investment, before we split 50/50, our average return was 81% and that included the one note that we lost $1,700 on. Some of the returns that we're getting are phenomenal. Five of the notes are re-performing, which means that we were able to keep the homeowners in their homes, which is fantastic. That's our number one goal. Our average return on those notes as we collect the monthly income is 30%. And then two of them are in some form of foreclosure. In fact, we're about to sell one. We just listed it today actually, so we should make a decent return on that. We always try to work with the homeowner and keep them in the home. Half the time we're able to do that, half the time it just doesn't work out. But you asked me the timeline so, of those five notes that we closed, our average return was 81%, the average number of days that we were in each of those notes was 163 days so that took less than half a year.   James: I mean, those are good great numbers. I mean, I mentioned in my book, find the right operator in that asset class and partner with them or invest with them for passive investors. So as I said in every asset class, there's always good operators. So the numbers you're telling me in non-performing notes in self-storage are huge, right? I mean, I know multifamily you can make money if the market went up and you have a really good operator that can handle that. On average, not everybody is making what you just told me right now on self-storage. So why is multifamily more popular than other asset classes?   Brian: There are more people teaching it.  James: That's absolutely my point. Brian: Yeah, I mean like there are some excellent instructors out there in multifamily and you and I are both the part of a group with one of them. I mean great top-notch training material. Okay. Yeah, there's just fewer people out there. Whereas you have between 10 to 20 people out there teaching multifamily, you could count on one hand the number of people teaching self-storage and it's even less teaching the non-performing note.  James: I understand. Yeah, it is it is true. There's a lot more people teaching multifamily, a lot more boot camps, a lot more 2 days weekend seminars on multifamily compared to self-storage or non-performing notes. And I think multi-family is also very simple to understand, it's a house. Not many people understand what is non-performing notes.  Brian: Yeah, there's all that educational like just understanding and wrapping your head around the concept. I got into multifamily because I understood the economy of scale and I understood people have to have a place to live. So if you can get them to pay their rent and that rent pays all your expenses plus the mortgage, well, you can make a lot of money that way. And then once I understood the next level of value, which is the income valuation method, how commercial multifamily is valued based on the income method and you can increase your returns exponentially if you understand that. The relationship between cap rate and your net operating income and value that was very compelling to me. And I think that still is very compelling when it comes to investing in commercial real estate whether it be multifamily or self-storage. I think non-performing notes, there's a lot more perceived risk in that because it's not valued based on any  - it's hard to understand how that's valued because there are so many different scenarios in which you can profit from non-performing notes. That you can't just say well we value it this way and if you buy this note, this is what you're going to make, it's kind of a crapshoot. But if you do it right and you partner with someone who knows how to avoid the dogs, you can actually make a lot of money doing it.  James: So what is the most valuable value-add in non-performing notes? Brian: You mean an example of one of our...? James: No, not an example. I'm talking about what is the one thing that if you do the most of the time or the frequency of things that you do in non-performing notes that you get the most value out of? Brian: Well, yeah, it differs note by note. I'll give you two examples. One is a property that was pretty much a teardown property that we bought the note on in Middlebury, Indiana. We paid $5,000 for this note and I asked my partner, I mean it's $5,000, this property is a teardown. How are we going to make money on this? And he said, well, we're not buying this for this property for the house that's on it. We're buying it for the land because it's right next door to a farm and this farm is owned by this Amish family. So he sent a realtor over to the Amish family and they ended up paying $35,000 for that note. So after closing costs and paying the realtor and getting our initial $5,000 investment back, our profit was over $24,000 that represented a 245% return and we did that in less than two months. James: Yeah, but you need to identify that opportunity. I mean, it's not like you can go and buy any deals right now. Okay, very interesting. Brian: Yeah. Yeah, absolutely. Another quick example of how you can profit on notes and I don't want it to lead you to believe that your best profit is always going to be a few foreclose or take possession of the property because you can still make a lot of money if you can work with the homeowners. We bought a note on a property in northern Michigan, probably about 9 or 10 months ago now. And I believe the numbers were in the line of we paid $20,000 for this note, got the homeowners re-performing, the unpaid balance on this note is $41,000. Once we have them season for 12 months, meaning that they're paying on time for 12 months - we've been working with them with a mortgage loan originator, where they can go and get new financing, permanent financing of FHA or Fannie Mae type loan in place with much better interest rate much better payments. Well, when they go do that, they're going to pay off that unpaid balance. So our $19,000 investment, now that I'm thinking about it was $19,000, our $19,000 investment, we're going to get paid that $41,000 of the unpaid balance on their note, plus the money that they've been paying each year. So our return on that is going to be 100%, it's actually over a hundred percent.   James: Across how many years?  Brian: We'll be out of that in under 15 months. James: Okay, interesting. Brian: Because they're going to refinance and when they refinance, we get paid that unpaid balance. James: Got it. Got it. What about on the multifamily properties that you own before 2015? What do you think is the most valuable value-add that you really like?  Brian: Well, they're all great because just anything I bought between 2008 and 2012, I've achieved an infinite return on those.  James: Okay. So refied it by and you kept it? Brian: Yeah. Yeah, we've refinanced, pulled our initial investment out. We have no money in the properties and we're collecting cash flow every month. So you can't calculate a return on that. Probably one of the best examples is a 37 unit that we purchased. We bought it at a short sale in 2009, was about 600,000 is what we paid for it. We put a $200,000 into it right away to replace roofs, windows. It was a hodgepodge of heating systems. There's electric baseboard heat and hot water boiler heat and then gas forced-air furnace heat. It just depended on which unit you were looking at. So we replaced a lot of the mechanicals, made it as much of a new property as we could, as far as just the mechanicals and the roof and the windows. And we refinanced it once it had over 1.1 million dollar value, pulled all of our initial investment out plus some extra cash flow and then we just refinanced it again, put a tenure fixed loan on it through the Freddie Mac. small apartment loan. So we got great terms on it, 30-year amortization. At that point, it valued over two million dollars. So we've added a lot of value to it and the compression of cap rates didn't hurt either.  James: Yeah. Yeah. Those are the awesome deals, the deep value-adds. That's where you can go and refi and make it infinite written because you pulled out all your cost basis. Brian: Yeah, yeah. Yeah, that's the goal to achieve infinite return. Whenever we can do that, that's what we do.  James: Absolutely. Aren't you worried about the state of the market right now in real estate in general?  Brian: You know, gosh, I was more worried about it two years ago than I am now probably. James: What has changed? Brian: Probably because two years ago, I was thinking, oh, it's going to turn any minute now and then it only got better and better. You and I both know Neil Bala and we talked to him at the last event we were at together and he made a very good case for the continuation of this market. And it basically rests on the fact that the United States, it's one of the few, if not the only places in the world where you can go to get real yield on your investment. We're seeing a lot of international money coming into the United States because in their countries, they're seeing negative yield or 0 yield. Here even if you can still get three or four percent yield on your investment, that's a lot of money. It's bringing a lot of money into this country and that's going to prop up our values for quite a long time. On top of that, I've always fought or believe that interest rates were going to rise and I've been believing that since 2000 and they keep going down. And even now, as we're speaking, they're talking about lowering the rate again by the end of the year. So that interest rate risk, I know we're playing with fire here and eventually, we're going to have to pay the piper but our government seems to keep coming up with ways to prolong this growth and the increase in prices. So am I worried? Not in the short term. No. No. The Economists I listen to are saying, oh, it's going to be a roaring 20s for us. Things are really going to hit the fan and. 2027, 2028, 29. James: Interesting. Yeah, because I think I don't know, maybe my thoughts are similar to yours somehow the Fed has figured out how to do quantitative easing and quantitative tightening. Somehow they're able to contract the economy and bring it down. So they could have found some new mechanism to keep the economy going even though our thought process always has been real estate goes in cycles. But at some point, you will hit an affordability issue, it can't [40:13unintelligible]  go up all the time, right?  Brian: Yes.  James: The prices can go up because the interest rate is coming down because now you can get more cash flow. But at the same time, you can't keep on increasing rent because our wages are not going up so much. I mean, I'm not an economist but at some point, you will hit some roadblock, but I'm not sure where is it and how is going to come.  Brian: Yeah, well, we're seeing a plateauing I think right now in just the rents that we're able to charge, the prices that people are willing to pay but it's still a very strong market. Now, don't get me wrong, I'm not going out there and just buying stuff like crazy because I am very conservative and like I said if I can't get the returns that I need to bring investors into my deals, I'm just not even looking at it. I don't anticipate that the market is going to have a huge correction, there might be a bump, I think if you're in a good market, like Grand Rapids, that bump won't be nearly as severe as some other places.  I'm keeping my eye on the market but at the same time, investing conservatively in asset classes that I think will be able to withstand the next correction.  James: Awesome. So let's go back to a personal side of things, right? So is there a proud moment throughout your career in real estate that you will remember for your whole life, one proud moment? Brian: One for a moment to put on my tombstone. James: Yeah, absolutely. That you really think that hard, I'm really proud I did that.  Brian: Yeah. So a couple of answers. I mean any time we're able to go in and improve a property and improving neighborhoods, that always makes me proud, you know, that we're adding value to a neighborhood and community. The older building that I told you about here in Grand Rapids, it was built in 1920. When we bought that it was very tired, kind of poorly managed, it was losing money. We were able to turn that around so I'm very proud of that. I'm very proud of the fact that we also fought very hard and work very closely with the city to be able to put a restaurant in that building. So the fact that when we bought it it was 96 apartment units and about 6,000 square foot of vacant commercial space. Now we had to work with the city to get it rezoned because it had been vacant for so long, it had to be reverted to being zoned residential. So we spent over a year trying to get it rezoned so we could add commercial in there, but we filled up all 6,000 square foot including a restaurant and that took about two or three years to do.  So when I think about what I'm proud of I think I'm definitely proud of that.  James: Awesome. That there is hard work  because you're turning the zoning from residential to mixed use.  Brian: Yeah, mixed-use residential commercial, just dealing with parking, number of parking spots and green space and tree canopies. I mean, it was a massive undertaking.  James: Yeah. It's very interesting that kind of work. I did one that was borderline and we merged it with an apartment and we did so many things. It was a very unique value-add that we recently refinance.  Brian: What was it, a lot of work for you? James: It was a lot of work because you have to go through, you know, buying the deal - you had to buy two deals at the same time. One is the apartment and one is the land and then we have to go to the city to merge these two plots. Then you had to rezone it, then you had to - I mean replot it, rezone it And then after you do a tree survey, you have to do so many different surveys have to do to get that. It's not normal in a residential, you know, where you buy today and increase rent, reduce expense kind of deal. But it's very interesting and people got 80% of our money within 15 months, which is huge, just by doing this creatively.  Brian: That's fantastic. Yeah. Yeah, you talk about its zoning and tree, you know.  James: Yeah, zoning and tree and all those. Brian: So it's a whole new world and it definitely is costly and time-consuming because you have to have experts on your team. You got to bring experts like architects.  James: Yeah, we brought in architects, engineers.  Brian: Yeah, engineers who even understand what it is that the city is asking for because if you were trying to do that yourself, you just would be a mess. James: Yeah. I mean the good thing about what you said about what I'm proud of this kind of process and 99% of the syndicators don't have that kind of experience. Brian: Yeah. I didn't have that kind of experience but now I do.  James: Most of the time, you just buy buildings and, you know, look at increasing income and reducing expenses and after that, at some point you sell but you don't do different contracts buying land and doing kind of things. So another question for you, Brian, why do you do what you do?  Brian: I love it. I love what I do. I feel very entrepreneurial about it because I've been an employee up until about five or six years ago. Whatever it was I was doing, whatever job, I always embraced it and did the best I could. But what I love about being an entrepreneur, being a full-time real estate investor, now syndicator/asset manager is that it's all very self-motivated. I'm the one who decides what needs to happen, what I need to pay attention to on a day-by-day basis. I don't have a boss or anyone else telling me, 'Hey, Brian, go do this' when I'm like, 'no, I want to go do this instead.' I get to call the shots. So that's what I love about it. I get to call the shots, I get to take time off if I need to take time off and I get to kind of fill my day with activities that I want to be doing. James: Awesome. Hey Brian, you want to tell our listeners and audience how to get hold of you?  Brian: Sure, James. First of all, you can go to my website, which is higinvestor.com. That's HIG is Hamrick Investment Group. You can also listen to my podcast and James you've been a guest on there so you can definitely listen to me interview James. It's the Rental Property Owner and Real Estate Investor Podcast and it's sponsored by the RPOA, which we begin this conversation talking about. And if you want to get in touch with me, you can also email me Brian@higinvestor.com.   James: Awesome, Brian. Thanks for coming in and adding value to my listeners and audience and to myself as well in the kind of things from our discussion here. I think that's it. Thank you very much.  Brian: All right. Thanks, James. It's been a pleasure. It's a lot of fun. James: Lot of fun, thank you.  

更多英语知识，请关注微信公众号:VOA英语每日一听Fanny: Hey, Brian, what's the most popular sports in Canada?Brian: The most popular sport is definitely ice hockey.Fanny: Ice hockey! So do you play hockey by yourself?Brian: I don't actually. When I was a kid, I wanted to play ice hockey, and I was always like begging my dad and asking him but he always said 'NO'.Fanny: Why?Brian: I think the big reason is that... Well, he told me it was too expensive.Fanny: Is it?Brian: It's not cheap. You know, it costs quite a bit to get all the gear but the big reason I think is the practice was always very early in the morning.Fanny: Oh, I see.Brian: Like five a.m. is when the practice is, and I think he was too lazy to wake up and take me to the practice.Fanny: Oh, I see.Brian: He told me it was too expensive. Deep down I think he was.... he didn't want to drive me.Fanny: So are there many people playing hockey?Brian: There are. It's a great sport. It's very popular with many children, and maybe high schools and universities all have hockey teams.Fanny: Oh, nice. That means you're a lot of rich people in Canada, then.Brian: Or maybe they spend all of their money on hockey gear. Have you ever played hockey?Fanny: No, no, not really. It's not that popular in China.Brian: What kind of sports are more common in China?Fanny: People always play soccer...Brian: Ah, soccer.Fanny: And table tennis. Table tennis is very popular.Brian: You're country is very strong at table tennis I think.Fanny: We always get all the medals in the big, you know, big eventsBrian: Why is table tennis so popular now do you think?Fanny: I think the first reason is that everybody can play it because it's very easy to get the, you know, the... to get ready for the sports. It's not expensive.Brian: No, I guess you just need the ball and the paddle.Fanny: The paddle. The ball and the paddle. Yes, and a partner.Brian: Right. Right. So have you played it then?Fanny: Yeah, I'm quite good at it.Brian: Oh, really.Fanny: Because my mother plays very well and so I always played with my mom, so I got better now.Brian: OK. So she taught you how to play table tennis?Fanny: Actually she didn't teach me but we always played together.Brian: Right.Fanny: Practice makes perfect.Brian: So they sayFanny: Yeah.

更多英语知识，请关注微信公众号:VOA英语每日一听Fanny: Hey, Brian, what's the most popular sports in Canada?Brian: The most popular sport is definitely ice hockey.Fanny: Ice hockey! So do you play hockey by yourself?Brian: I don't actually. When I was a kid, I wanted to play ice hockey, and I was always like begging my dad and asking him but he always said 'NO'.Fanny: Why?Brian: I think the big reason is that... Well, he told me it was too expensive.Fanny: Is it?Brian: It's not cheap. You know, it costs quite a bit to get all the gear but the big reason I think is the practice was always very early in the morning.Fanny: Oh, I see.Brian: Like five a.m. is when the practice is, and I think he was too lazy to wake up and take me to the practice.Fanny: Oh, I see.Brian: He told me it was too expensive. Deep down I think he was.... he didn't want to drive me.Fanny: So are there many people playing hockey?Brian: There are. It's a great sport. It's very popular with many children, and maybe high schools and universities all have hockey teams.Fanny: Oh, nice. That means you're a lot of rich people in Canada, then.Brian: Or maybe they spend all of their money on hockey gear. Have you ever played hockey?Fanny: No, no, not really. It's not that popular in China.Brian: What kind of sports are more common in China?Fanny: People always play soccer...Brian: Ah, soccer.Fanny: And table tennis. Table tennis is very popular.Brian: You're country is very strong at table tennis I think.Fanny: We always get all the medals in the big, you know, big eventsBrian: Why is table tennis so popular now do you think?Fanny: I think the first reason is that everybody can play it because it's very easy to get the, you know, the... to get ready for the sports. It's not expensive.Brian: No, I guess you just need the ball and the paddle.Fanny: The paddle. The ball and the paddle. Yes, and a partner.Brian: Right. Right. So have you played it then?Fanny: Yeah, I'm quite good at it.Brian: Oh, really.Fanny: Because my mother plays very well and so I always played with my mom, so I got better now.Brian: OK. So she taught you how to play table tennis?Fanny: Actually she didn't teach me but we always played together.Brian: Right.Fanny: Practice makes perfect.Brian: So they sayFanny: Yeah.

更多英语知识，请关注微信公众号:VOA英语每日一听Fanny: Brian, my last question seems too serious.Brian: It was. It was a very academic kind of question.Fanny: Yeah.Brian: You're testing me,Fanny.Fanny: Sorry for that. I would also like to ask you some funny questions.Brian: OK, hit me.Fanny: Have you ever seen a polar bear?Brian: Have I seen a polar bear? Unfortunately, I have not.Fanny: No, really?Brian: I think you need to go really far to the north.Fanny: North. Yeah.Brian: Like, up around, like the North Pole maybe because I think the polar bears live like only on the ice, and this is like really far from any kind of like, you know, city or civilization, and I've never been up to like such a remote kind of place.Fanny: OK, I see.Brian: Unfortunately no polar bears. I've seen other bears, but no polar bears.Fanny: OK, me either.Brian: No polar bears in China?Fanny: I don't think so.Brian: No.Fanny: I don't think it's cold enough to have polar-bear there.Brian: How about Panda? I've heard there are some Pandas in China.Fanny: Yeah, I saw Panda for several times.Brian: In the wild or in a zoo?Fanny: In the zoo.Brian: Oh, OK.Fanny: And on TV. I just joking. I just saw some pandas by myself in the zoos, but I don't think they are the, you know, how do you say, because I think in the wild we can see the Pandas. We can see their activities more.Brian: Right.Fanny: How should I put that?Brian: It's more natural maybe.Fanny: Natural, yeah. It's very natural, but in the, you know, in the zoos the pandas are always sleeping. They're... or they're just eating something.Brian: Lazy animals.Fanny: No, the cannot do some, you know, outdoor activities.Brian: Right.Fanny: Poor pandas.Brian: It's a shame.Fanny: Yeah, it is.

更多英语知识，请关注微信公众号:VOA英语每日一听Fanny: Brian, my last question seems too serious.Brian: It was. It was a very academic kind of question.Fanny: Yeah.Brian: You're testing me,Fanny.Fanny: Sorry for that. I would also like to ask you some funny questions.Brian: OK, hit me.Fanny: Have you ever seen a polar bear?Brian: Have I seen a polar bear? Unfortunately, I have not.Fanny: No, really?Brian: I think you need to go really far to the north.Fanny: North. Yeah.Brian: Like, up around, like the North Pole maybe because I think the polar bears live like only on the ice, and this is like really far from any kind of like, you know, city or civilization, and I've never been up to like such a remote kind of place.Fanny: OK, I see.Brian: Unfortunately no polar bears. I've seen other bears, but no polar bears.Fanny: OK, me either.Brian: No polar bears in China?Fanny: I don't think so.Brian: No.Fanny: I don't think it's cold enough to have polar-bear there.Brian: How about Panda? I've heard there are some Pandas in China.Fanny: Yeah, I saw Panda for several times.Brian: In the wild or in a zoo?Fanny: In the zoo.Brian: Oh, OK.Fanny: And on TV. I just joking. I just saw some pandas by myself in the zoos, but I don't think they are the, you know, how do you say, because I think in the wild we can see the Pandas. We can see their activities more.Brian: Right.Fanny: How should I put that?Brian: It's more natural maybe.Fanny: Natural, yeah. It's very natural, but in the, you know, in the zoos the pandas are always sleeping. They're... or they're just eating something.Brian: Lazy animals.Fanny: No, the cannot do some, you know, outdoor activities.Brian: Right.Fanny: Poor pandas.Brian: It's a shame.Fanny: Yeah, it is.

更多英语知识，请关注微信公众号:VOA英语每日一听Fanny: Hey, Brian, you know, recently I heard that the Canadian dollar is very strong.Brian: It is. It's been amazingly strong in the last few months.Fanny: What happened? I mean, how come?Brian: It went up. The reasons behind why the Canadian dollar is strong...Fanny: Yeah.Brian: Very good question. Without getting too complicated, my understanding is the Canadian dollar is linked to a lot of primary industries, so things like, say like, oil or mining or timber from like forests and right now I think there's a high demand for those kind of products, so because of that it's pushed the Canadian dollar up. But also I think many other currencies have gone down a bit, like the American dollar has dropped a lot.Fanny: Really. OK.Brian: I don't follow the currency markets too closely.Fanny: OK, I see.Brian: But I think because the American dollar has gone down as well, that means that, you know, it doesn't take as much Canadian money to equal the American money now, so I think those are probably two of the reasons why it's been strong.Fanny: I see. I know that Canada is a country which is really rich in the natural resources, but are there still a lot of natural resources left now.Brian: That's another good question. I think that there are still quite a lot of resources.Fanny: Oh, nice.Brian: Which is, you know, is good but some of them are decreasing quite a bit.Fanny: I think so, because of consumption.Brian: It's too...Fanny: Too big.Brian: Right.Fanny: Yeah.Brian: And we export a lot of our resources too, so, you know, the Unites States is always taking a lot of our resources so that's like a huge market right there, but I think there's still lots of oil but maybe the... some of the trees, you know, they cut them down pretty fast and they take a long time to grow back, so you have to watch out there.Fanny: OK, I think that's a very reason for the strong Canadian dollar.Brian: It could be but you probably should ask an economist. Maybe they can tell you a bit more informed insight than I can.

更多英语知识，请关注微信公众号:VOA英语每日一听Fanny: Hey, Brian, you know, recently I heard that the Canadian dollar is very strong.Brian: It is. It's been amazingly strong in the last few months.Fanny: What happened? I mean, how come?Brian: It went up. The reasons behind why the Canadian dollar is strong...Fanny: Yeah.Brian: Very good question. Without getting too complicated, my understanding is the Canadian dollar is linked to a lot of primary industries, so things like, say like, oil or mining or timber from like forests and right now I think there's a high demand for those kind of products, so because of that it's pushed the Canadian dollar up. But also I think many other currencies have gone down a bit, like the American dollar has dropped a lot.Fanny: Really. OK.Brian: I don't follow the currency markets too closely.Fanny: OK, I see.Brian: But I think because the American dollar has gone down as well, that means that, you know, it doesn't take as much Canadian money to equal the American money now, so I think those are probably two of the reasons why it's been strong.Fanny: I see. I know that Canada is a country which is really rich in the natural resources, but are there still a lot of natural resources left now.Brian: That's another good question. I think that there are still quite a lot of resources.Fanny: Oh, nice.Brian: Which is, you know, is good but some of them are decreasing quite a bit.Fanny: I think so, because of consumption.Brian: It's too...Fanny: Too big.Brian: Right.Fanny: Yeah.Brian: And we export a lot of our resources too, so, you know, the Unites States is always taking a lot of our resources so that's like a huge market right there, but I think there's still lots of oil but maybe the... some of the trees, you know, they cut them down pretty fast and they take a long time to grow back, so you have to watch out there.Fanny: OK, I think that's a very reason for the strong Canadian dollar.Brian: It could be but you probably should ask an economist. Maybe they can tell you a bit more informed insight than I can.

In today's episode, we help Brian figure out if his business idea will make money online. FULL TRANSCRIPT Jocelyn: Hey y'all, on today's podcast we help Brian figure out if his business idea will make money online. Shane: Welcome to the Flipped Lifestyle Podcast where life always comes before work. We're your hosts, Shane and Jocelyn Sams. We're a real family that figured out how to make our entire living online. Now we help other families do the same. Are you ready to flip your life? All right, let's get started. Shane: What's going on everybody? Welcome back to the Flipped Lifestyle Podcast. It is great to be back with you again today. Super excited to talk to another member of the Flip Your Life community. You'll have to bear with us. Jocelyn and I are just getting back from a conference, and both of our voices are a little shot. We're still a little jet lagged, but that's not going to hold us back from helping today's Flip Your Life community member, Brian Kelley. Brian, we're tired, but welcome to the show. Brian: Thank you. Thank you for having me. I appreciate it. Shane: And Brian's on the road too. He's on the road too. Brian: I absolutely am, yup. Shane: He's in Chicago at a conference, so he might be a little tired too. We're going to go through this now. We're going to fight through it together. How's that? Brian: That sounds great. Jocelyn: We're excited to talk to you today, Brian. You are coming to our event, which is coming up very, very soon so that is super exciting. And I know that you have been taking a lot of action lately which is how you got on the show today, so congratulations for that. And we can't wait to hear a little bit more about it, but before we get there let's hear about you and your background. Brian: All right. I work in restaurants. I've been in the restaurant industry for about 25 years, and I actually love it. I love my job. I'm married with two kids, and the issue I tend to run into is that I'm concerned about our financial future. I like what I do, but both of our kids have special needs, and it requires extra planning for the future. I don't think that there's a way for me to get my family where we ultimately need to be at retirement with just our incomes. So I'm looking to supplement it with something online. Brian: And then the other reason that I've been pursuing it is just because I think it's a lot of fun. I've listened to your Podcast for a long time now, and I've actually been a member for a year. Everything that I learn that's new and sitting down and actually creating a website and stuff is really intriguing to me. I find it exciting, and I like it, so that's kind of why I chose this path. I'm just looking for any bit of success at this point. I think I've done a lot of the base level stuff. I'm up and rolling, and I'm just trying to get that first dollar made. Shane: Dude, I get it, man. I sat there for months and months waiting for any amount of money to flow into my pocket. And what's crazy is we ask our guests on the show, we look for people in the forums who are taking action, filling out success stories, helping other people, and you have just had this flurry of activity. You've been taking all the courses, talking in the forums, coming to the live event in September, and all of this stuff lately. And that's kind of how we were like, "Whoa, what is this guy doing? He is doing everything. We've got to get him on the show, we've got to help him because we really want to reward action takers in the community." What caused this flurry of activity. You said you've been in the community for a year now. What's happened lately or changed or how'd you [inaudible 00:03:42] to get moving forward in your business? Brian: It was two things. It was, one, probably first and foremost, a new idea for a website. And secondly was I just got really angry that I hadn't finished my last idea, that I hadn't succeeded with it. I got mad and determined because of that. So I just committed and said I was starting again and going to try to do it again. Shane: And are you looking to create a full time income right now or is it more like a side hustle like you love your job? Are you looking to create something on the side that's more like, "Hey, now I can make a lot more money and still do this job that I love, and then maybe someday I can use it to get some time freedom back?" What's the ultimate goal right now? Brian: The ultimate goal is to create a full online business. Shane: Right, right, right. Brian: [inaudible 00:04:39] I want now like I really meant it when I said I think this stuff is really fun, and I'm extremely dedicated to it. I don't have to have ... I'm not beating down the door to escape my job. I love it. I love the people I work with. It's not an urgent need, but there is that need. It has to happen over the next 10 to 20 years for sure. Shane: For sure, yeah. Recently I met this guy named Mark Mason. He has a Podcast called Late Night Internet Marketing, and his story reminds me of yours a lot. He was like, "I love my job. I've got a great job. It fulfills me. I love the people I work with. But I like other things too," is what he said. And he's like, "And of course, if anything ever happened I've got this other thing. It's sitting there waiting for me. I've got choices in my life." And that's what online business can do for you. It gives you choices, and it gives you exactly what you need in the moment. Some people may love their job and just want some extra money or some people may love their job, but they're not quite sure how it could handle a recession, so they want to have something in their back pocket to do that. And some people are like, "Man, I love my job right now, but I'm smart enough to look into the future and see I'm going to need something different later," right? Brian: Yes. Shane: All of us should be doing that. Even in our online business right now we do that a lot. We look into the future and be like, "What is our business going to look like 10 years from now? What does it need to look like based on our needs, our kids' needs, our future needs as we get older or whatever?" And we have to think about those things, and it's really cool that you're seeing the flexibility here of, "Hey, let's not get desperate. Let's not get crazy. Let's just build something cool and have fun with it, and it will be there for me if I need it and my kids need it. Brian: Yes. Jocelyn: All right. So you like your job now, but you want some options as far as making extra income, which I think is a great idea. I actually used to work in the restaurant industry too years ago. I don't know if you've ever listened to our Podcast where I talk about I used to work for a commercial dish machine manufacturer. Shane: She puts your dishwasher in the back room is what she did for them. Brian: Right. I heard you say that on the Podcast. I think about it every day when I walk by a dishwasher]. Jocelyn: Yeah. Shane: That's hilarious. You might be the only person that sees a dishwasher and thinks- Brian: I know people who sell this equipment. That's right. Jocelyn: So I actually didn't do a lot of end user work. It was mostly to manufacturers' representatives and that type of thing. But anyway, so yeah I know about the restaurant industry. I've been to many trade shows and all that kind of thing, so I know a lot about restaurant stuff. Anyway, I love that you are trying to branch out and do something different. Let's talk a little bit about that. What have you tried before, and what are you doing now? Brian: Okay. As far as what I've tried before there's probably a list of five or six, maybe more, things going back 10 years all the way starting with Etsy and just trying to make products for Etsy. I looked into doing drop ship stuff for a little while and decided that totally wasn't for me. Most recently when I joined the community I had an idea for online fishing tournaments. I thought it would be really fun to do online fishing tournaments. I have a lot of friends and family that are competitive at fishing, and I thought it was going to be a great idea. The issue I ran into was two-fold. One, it really wasn't ... What I had created wasn't conducive as it was, so the membership model and I really wanted to do that, and it required so much involvement that it just was never going to work with my schedule. I didn't have the time to execute the operation, so I kind of let it die, and I got discouraged because that was my favorite idea at the moment. Shane: What is an online fishing tournament? How would that even work? Would I fish at my house and you would fish at your house and we'd take pictures? Jocelyn: No, this is what I think of. Do you remember there used to be the Nintendo Wii that had those little controllers. There was a fishing tournament on there. Shane: Oh yeah, yeah, yeah. Jocelyn: That's what comes to my mind. Shane: Oh yeah, we would compete on ... What was ... Brian: Actually it was like real fishing, and it's modeled after the capture, photo, release style of fishing, which is what a lot of kayak fishermen do. So instead of wait it's on links, so I built an app and people could just take a photo of the fish they caught on a fish ruler and upload it. And basically it allowed people to compete wherever they were on the same species of fish. Shane: That's actually a really cool idea though. Brian: It is, but the problem is I had to be there to launch the tournaments, and I had to be there to judge the tournaments, so there were specific times where I would have to wake up at like ... Fishermen wake up at, like, four in the morning, right, to launch a tournament. And then I had to judge it, and then there were issues with faking species. Shane: Okay, yeah, yeah, yeah. Brian: There's some logistics that ... I still have that website. I have not thrown it away. I still have an e-mail list for it. There's a ton of interest in it. I just can't execute that right now. Shane: Interesting. We'll keep that one in your back pocket, okay? Jocelyn: I have never heard of an online fishing tournament. This is a first. Shane: My nephew comes over. We've got this lake behind our house. And he'll just sit here and catch fish for five hours. He's all by himself, but I could picture that being like what if he was virtually with other people fishing at the same time? Brian: And could win money for if he caught a big fish. It makes it a lot of fun. Shane: What a cool idea? That's an amazing idea. What else did you try? Brian: Oh gosh. We were doing ... I was trying to do something connected to restaurants so I modeled a website after some others I had seen that were basically just promoting websites kind of like an affiliate except it was locations and venues would pay a fee to be listed on the website, and the website would market to people that were traveling to the area, give them itineraries, lists to view, things like that. Shane: That sounds cool. What was the holdup there? It's too hard to get every restaurant in the world on it kind of deal or ... Brian: No, it was honestly ethically I didn't want to promote ... I work at a restaurant. I didn't want to promote my competition, and I didn't think that was the right thing to do. And it was honestly that started out as a way for me to gain a marketing strategy for my own restaurant briefly, and I just didn't feel okay doing that. And also there's a reason that ... I'm very experienced in the restaurant industry, but there's a reason that the things that I'm choosing to do are not related to the restaurant, and that is because I don't want burnout. Restaurant hours are long, so if I were to tackle more restaurant stuff after that I just feel like it's restaurant all the time, and that's just too much for me. I think I'd burn out because [inaudible 00:12:11] something new. Shane: For sure. A lot of people come into the community, and one of the things that you hear online a lot is, "Chase your passion and the money will follow." And there is a lot of truth to that, but like Jocelyn and I usually try to start with something you're more familiar with because it's actually a lot easier to create something and make money with something you're trained for or that you know. But if someone doesn't want to do that there's lots of other alternatives. You don't have to do that, and I totally get the burnout stuff. Shane: Even as much as I used to love football coaching, like I loved it. I ate it, I breathed it, I slept it. I was always on football coaching. But after you start a community for football coaches, you talk to coaches, you go to work and coach, you come home and coach, and you make playbooks, and you go study playbooks, then you use your playbook on Friday night I really felt the burnout. It didn't matter how much I loved or was passionate about coaching football, at the end of the day you've got to do something else, like you've got to do something else. I can totally get onboard with that. Shane: Tell us about your idea now and how did you switch to that, and when did you start it? Brian: All right. My ideal now is to educate people on credit card points, travel points and miles that you can accumulate spending on credit cards and how to cash them in for maximum value to book free trips and vacations. So my website now is learnthepoints.com, and there is a strategy in there which we teach people so they can earn eight to $10,000 worth of free travel in basically nine months. So that's my goal is to have people that are willing to pay for a monthly membership for even if it's a short term be educated on the best way to accumulate these points and to redeem them for the most value. Shane: And also, too, make sure you're paying off the credit card, staying out of debt? Brian: Yes, 100%. Shane: It's always free money, right? Brian: It's free money. Don't spend anything that you weren't normally going to spend and set up automatic payments, pay everything off every month. I came up with this idea. I got shocked, honestly, just recently. My wife and I do not have any debt. It took us a while to get there. We're very credit card averse. I had just never looked into credit card points before. I had heard people talk about miles and flying and all of that stuff, and I just assumed in my head that these were people that fly all the time, and that's how they do this or they're on these big corporate accounts, so that allows them to rack up all these points. And that's just something that's not for me, and I don't apply for credit cards, so when offers come by I don't look into that stuff. Brian: But what happened was we went through a dark time in December as a family, and when the end of the school year was rolling around and it was summertime was coming up, and we were like, "We need a vacation." All I had set aside for vacation for free money was, like, 500 bucks, which is not bad. We can have fun as a family on 500 bucks, no problem. But all of our other money goes to saving. It all goes to retirement accounts or education accounts or you name it. So we've never really taken a really awesome vacation. Brian: It was kind of out of desperation or just, "You know what? I'm going to look into this and see what it's about," that I discovered what the possibility was with credit card points. And then when I realized all these bonus sign up tricks and stuff I just got obsessed and started doing all this research and figured it out and based on that developed a strategy and a plan that's basically going to get us free vacations for the next three or four years for our family. I was like, "This is awesome. How did I not know about this for so long?" I was like, "Hey wait. This could totally be an online business. Other people need to know about this." So I just popped up a website real quick and then got enthused and jumped back into the trainings. Shane: Wow. Brian, what happened in December? Brian: Unfortunately in December we lost our daughter at birth. She died, and we were really excited. We have two boys that are young. They're four and five. Both of our boys have special needs. They're both autistic, and my oldest son has Down's syndrome. We were really excited not just to have a girl in the family but to have what would be most likely our first typically developing child as well. And it was just we were really excited about it, and there were complications during delivery, and she passed away. So it was a really sad time. There's a lot of grief and anger that comes with that, and it really ... My wife and I both went to counseling. We both got help through our church. We had spent probably three months was just like in shock and recovery. And then the next three months was kind of like just rebuilding your life a little bit and trying to return to normalcy. Brian: But after being through those last six months and dealing with that there's just this need for a break like from all of life almost in a way. We work hard. We have separate schedules. It's crazy at the house because the kids are crazy. So I could see it on my wife's face like we need a vacation. Shane: Like an actual remove from the world like- Brian: Like the community pool is not going to cut it this time. We've got to go. Jocelyn: Absolutely. Shane: How did you explain it to your kids? It would be hard enough explaining it to kids who are developing at normal rate. Was it tough? Brian: It was tough because we did a lot of practicing. We did a lot of therapy going up, so we had a doll that we carried for half a year before the due date where we were training the boys on, "Hey, this is Baby Sister, and this is how you hold Baby Sister." It took us three months before they stopped throwing the doll around. We were practicing and training and getting ready, and we had her room ready of course. We found our own special ways to talk about her with the boys and remember her. I feel like we're in a really healthy place thanks to the involvement of others in the communities that we're in mostly. It's always sad. It's just something that you're never going to forget. You don't move on from it so to speak, but you cope better and better every day. Shane: Yeah. I appreciate you sharing that. I know that's probably really hard to talk about. Jocelyn: That's just heartbreaking. I'm so sorry to hear that. Shane: It is. I'm having trouble even not crying right now, and I stammer over my words for a few minutes. I also want to just kind of highlight that you did recover, and you did move forward, and I love how you harnessed the negative thing to think about something positive like my family needs to more forward. We need to go on a vacation. That's not trivial. That's a thing that's going to help us to take the next step because we have to take the next step. Brian: Right. Shane: And then even to come up with an idea like we have a saying that we always say around our house and around our kids and others is like, "Successful people don't say I can't do that. Successful people say how can I do that?" So you didn't say, "Oh there's only $500 in the bank. I can't go on a vacation." You said, "No, this thing is important for our family. How can we make it happen?" And that's true for life. That's true for online business. That's true for anything like if you're going to be successful you've got to figure out how to do it. So regardless of whatever happens with this online business idea, dude, just the fact that you made that happen, and your family did the thing was totally worth going down that path. Brian: Yeah. Shane: That's a powerful story, man. There's an awesome story in the Bible, I believe it was David's son passed away. I don't want to butcher the Bible, but I'm just going off the cuff here. And he mourned, and then he immediately put on his cloak and got back to work. In the story people were like, "What are you doing?" And he's like, "I have to move forward. I've got other sons. I've got a kingdom I have to do," and I really felt that kind of story coming through when you were telling us that, man. I have no words about something like that, but I am very impressed and inspired by that story you just told me because if that ever were to happen to us I know, "Hey look, Brian got it, he stepped up, we can do this." So anybody else out there listening to this I hope you are really inspired by Brian's story too. Jocelyn: Okay. I am kind of curious, and I'm sure other people are too. So you got this credit card thing going. You started learning about it. And were you able to book something? Brian: We're actually we've racked up a ton of points, and we're saving them. We started kind of at the beginning of the summer, and my wife works for the school district. School's about to start, so we're just deciding what date we're going to book and where we want to go. Shane: That's amazing. Brian: We're kind of lined up and ready. We're all excited now. It's like one of those things where we were really anxious to go anywhere. We would've taken anything, you know what I mean, but now that we've got these points in the bank and we can pretty much go anywhere for free we're like, "Hold up, hold up, let's think about this. Let's pick a really good one." Shane: Right. We get a lot of points too. We're like you though. We're like we hate debt. Credit cards scare us. I pay out credit cards. Any credit card use that we have I pay it off every week, every Thursday. I don't mess around. Every Thursday I sit down. But we use two cards. We have a business card, and we have a personal card. And we put everything on it, like everything. And we pay it off once a week because man those points are like free flights here, free all-inclusive vacation in Cancun. You can just book hotels. Jocelyn: We travel a lot because our daughter's on a travel cheer team, and I got every room last year except for one for free. Shane: Yeah, and that's like nine cheerleading vacations. Nine weekends of the year we're on the road staying two or three nights. And it's just you show up, and you have a room for free. Brian: And what I think is crazy is that there are just so many people that were like me six months ago, had no idea that you could do this. Shane: I didn't know you could do it either because we were Dave Ramsey people too of course. We're like, "Get out of debt. Never use a credit card. Credit cards are evil." And I'm like, "But they're giving you free money. Wait a minute. Let me look at this for a minute." Now, you're not going to get rich off of it, but free money's free money. It doesn't matter how you look at it. Jocelyn: And disclaimer, we do not advocate going into debt to get credit card points. Shane: No, don't go into $10,000 in debt to get $5,000 in credit card points. That doesn't make sense. You're losing money there y'all. Tell us a little bit more about that. Brian: What I try to get people to understand, and I don't know if my message is really good. I'm still trying to perfect it to get it quick because there's a lot of pushback. People just don't know that you can do it. There are credit card fees on some of these cards, but essentially I had $500 in the bank. For $500 you can afford the credit card fees on eight different cards at one time. And if you were to do that you'd have somewhere between, depending on your spending, $8,000 and $12,000 worth of free travel. So it's not that it's- Shane: Right, you're spending 500 for 8,000 basically. Brian: Yeah. If you were going to spend 500 you have two options. You can either spend $500 on your vacation or you can spend $500 on the credit card fees and take a $10,000 vacation. Shane: Yeah, that's incredible. We actually know a guy that does something similar to this. He was a member of the Flip Your Life community. His name's Brad Barrett. Have you ever heard of Brad Barrett? Brian: I did. I started researching everybody. I found his ... He has a Facebook group and a training that he does. And it's awesome. Facebook group is an awesome community. He built something really great there, and his training is very to the point and succinct, and it's good info to. So I really liked looking at his stuff. Shane: Yeah. And he was an accountant, and he really did want out of his job. He just went all in. But he focused. He only went like ... It was to go to Disney. It was straight up to go to Disney. That's how he taught it. And we've met other people who do successfully do this. And I was just at a conference this weekend, and someone was telling me like, "You know, I feel like I've got to invent a brand new thing. I've got to go the blue ocean." You guys hear that blue ocean, red ocean stuff? Brian: Right. Shane: And I looked at him. I said, "No, that's not what you do." You don't have to bake a new pie. You don't have to invent a new recipe. You've got to look around and find a pie, and you just want a slice of that. So that's why we always really encourage people like if you see someone else doing something similar to you that's not bad. That's good. That means that they've figured out how to make money at it, and there's 4 billion people connected to the internet. I promise you they're not selling to all 4 billion people. You just need some of the other people that are interested in that space. It's like abundance mentality. There's more than enough customers out there. You don't have to invent the better mousetrap. You just need to find people that need a mousetrap and sell them one. You're on the right path, and there's definitely something to this. So what's holding you back right now? Is there a mindset issue or an obstacle from doing this? Brian: Okay, so I went back and I watched the Vetting Your Idea video. So I had jumped into this full force before watching that video. I wish I would've watched it first. Shane: Wait a minute. So you're saying you should do the Flip Your Life blueprint in order? Brian: Shane, I knew you were going to say that. I knew you were going to take this opportunity to tell people to follow the plan the right way. Shane: Right. People jump in all the time, and they're like, "I watched video 12, and it was awesome." And I'm like, "Did you watch one through 11 because they're important?" You've got to do it in order. The Vetting Your Idea course, you know what's funny about that course in particular. I laugh because I'm saying watch it in order. When we made the blueprint, when we created the blueprint that course didn't used to be in there. Yeah, because we were so caught up in helping people find their idea and get started. I kind of looked at it, and I was like, "I go through the process whenever we have a new business and I'm like is someone else doing this? How do I find out if it's making money online?" I have a process that I check things, and I realized we were ... Because a lot of times people get held back, and I didn't want to put too much information in front of someone like I just wanted you to get your idea and start because that's where the real magic is when you start. Shane: But then I thought, "Wow, there's really an easy way to tell if people are making money on this, and I just need to show that to them." So we put that course back in later. I actually made that course after the original blueprint was created so that people could properly vet that, yes, this is a real idea. People are definitely making money online, and I can check it empirically. I can go and say, "That is a 100% truth. This can make money online. I just have to do it." And that's kind of probably what you saw when you watched that with the idea course. Brian: Yeah 100%. So I started looking, and what I found a lot of regarding credit card points and miles there's a ton of people who are offering free courses, and they are using affiliate links for their credit card sign-ups. Shane: Yes 100%. Brian: That is what most, like 95% of what's out there is affiliates for the credit cards, which I don't think there's anything wrong with necessarily although I have started my website and really pushed that I am not an affiliate for the credit cards. Shane: Great differentiator. That makes you different. Brian: Yes. I've also noticed affiliates have different promotions and all that stuff, and sometimes teaching others isn't true. It's just not the best version of the information because they're promoting a specific credit card before another one, so I really wanted to focus on ... yeah. I really want to focus on what's going to be my users, my guests on my site, and what's going to get them the most bang for the buck the right way to do it. I'd rather not get involved with affiliates at all. I'd rather just tell them the truth like if you want to get the most money this is how you get the most money. Shane: So one sticking point is like you're kind of ... You said a lot of other people have went down the road because if I can get you to sign up for the credit card I might get a $100 fee. The bad part about that strategy is you're really relying on a lot of traffic. You've got to have a lot of traffic coming in to make that work because you're not getting any recurring off these credit card points that you get people to sign up for. It's just you get 100 bucks, you move on. You know what I mean? So you almost have to get them to sign up for five at once just to make a good chunk of change out of the beginning. Are you concerned that nobody will pay for it because the other ... Brian: Right. I was concerned that nobody would do a membership for the information. There is a lot of free information out there. It's just that my information's better than the free information that's out there, but I need to be able to convince people that it's worth whatever I'm charging right now I set it up to charge $25 a month. Shane: Right. Brian: I did find at least one site that is doing a membership model, and that gave me hope, but it was hard to find. Shane: To be fair the internet's a big place. You know what I mean? So there's probably other people out there doing it to. If you found one there's probably more. Brian: Yeah, I would think so. There is another aspect to it. Some people are also doing one-on-one coaching and booking trips for people using their credit card points to get the most value for it. So those are some one-offs that I found. But my biggest concern is that looking for validation that approaching this from the membership model setting up a $25 a month membership to educate people and provide them with free tools and resources is something that somebody will pay for, that it'll work. Shane: I would say they would if you position it correctly, right? Because there's an old saying in copywriting where if you can give people free money they'll buy your product. And this is a free money product. It is. It's like if you get the cards you will get free money. You will get the points. So if you can say, "Hey look, I ..." Telling your story is the most critical part of your marketing because you literally did this. You're like, "Look, I have no debt. I have these cards. I've got three vacations, enough money for three vacations over the next three years. I have $8,000 in credit card points. I spent $500 to do it. I made $7,500." This is true. These are all facts. You can check it. It's 100% real, and it happens when you do it this way. So like that's free money. It really is. It sounds so scammy but it's not. It's free money. It really is free money. Brian: It is, yes. Shane: And you've actually done this. Your story is where you have to start with your marketing to convince people that that's going to happen. Jocelyn: I almost feel like this is one of those situations where it's a side-by-side. And what I mean by that is that you have a course on one side, and you list all the benefits of just doing the DIY course. And then on the other side you have your monthly payment, which is the same price as your course, but it just recurs. And you position that as this is the courses plus support from me as you go through this. Shane: Yeah. So it is kind of two products. The content is isolated, but then there's a way to interact with you like I'm going to help you make purchasing decisions, and I'm going to help you. I'm going to walk with you as you spend the money. We're going to have a ... A buddy of mine does a membership, so listen to what this is. He does this membership where basically it's a writing hour. So twice a week he shows up, he does a quick writing tip, and then basically he has, like, 300 members and they all just show up to write together. That's what they do, but it's accountability. It's to ask a question. It's to just hang out really. There's no relieving content involved in the membership, but people love it because they've got somewhere to go in the moment to either get accountability or ask a question. Shane: So it's like you could have a weekly pay off your credit card party. Hey guys, last week we got our groceries. Hey Jim, what'd you do? Oh man, I bought a subscription to Netflix. Okay, let's pay that off. You could keep people out of debt parties. It's not like you're really even answering questions. It's just you show up, and everybody's accountable to stay out of debt while they're accumulating their points. And then they can ask questions to you like, "Well, I found this other card. Is this a good card Brian?" Yeah it is. That's a good card. You should do this. You should do that. Don't worry. You can trust my advice because I'm not an affiliate for that card. Brian: Exactly. Shane: But you can throw stones at the other people like, "Hey guys, all these other people they're recommending cards that give them the best affiliate payout. Not me. Brian you can trust because I'm here for you." I love the idea that the course is separate or they can work with you for real, work with you. And your whole story then becomes so important because now they trust you to join your membership community. So you're not selling them content anymore. You're not selling them the path anymore. You're really just selling you. You know what I mean? And your experience, your coaching, and your leadership. Brian: If I switch this over and change it so I've got this side-by-side thing going on on the website would you market or promote the course, and then when they get to the landing page they would see the course or the membership option then? Shane: I'm going to give everybody that's listening a tip right now. Nobody cares what's in your course. Nobody cares about the course. All they care about is your story. The only thing I would be telling yours like you need to go on this vacation, and you need to have some pictures of it, and you need to be able to talk about it, and you need to be able to blog about it. And everything happens going forward is I had this horrible experience. I knew my family needed vacation. I found a way. We did it. And now I'm bringing the torch back from Mt. Olympus. This is a heroes journey story if there ever has been one. Jocelyn: I agree. And I don't think that the course material is unimportant per se. Shane: Right. It's not unimportant. It's just not the most important. Jocelyn: But I do feel that the most important things are being able to relate to you, can you solve their problem, and then the course material is way on down the list. Shane: Yeah, yeah, yeah. It's like the second thing. Jocelyn: And I think people get this backwards. People always want to do their sales page look at all these wonderful things that I have in my course or program. And they want to give you the 10-minute rundown of every nut and bolt in their program. People don't care about that. People care about can you solve my problem and do I like you? Shane: What most people remember at any event, like let's say you go to a rock concert, when musicians create their set they really focus on the first song and the last song because that's what you're going to remember. It's like a movie. You remember how a movie started. A lot of stuff happens in the beginning, and we all remember the end. You know what I'm saying? Jocelyn: Right. Shane: It's like Avengers. There's like 18 movies over like 20 years, and pretty much it all boiled down to at the beginning Thanos wanted some rocks, and at the end Iron Man fights him. That's what we all remember in between, right? So that's kind of what you're doing here. It's like, "This is my story. This is real. You can trust that it's real because all these other people are only recommending things that pay them good. I'm not because I'm not an affiliate for any of these people. I'm telling you the truth, and inside my community I'm going to help you do it. Shane: So you can have a general list of things like categorical these are the results you'll get inside. Know the first thing you'll buy. Know the first card to get. Know the order that they're going to get. You're more telling the results, but you're not telling the exact courses and all that stuff. There's no reason to. No one cares. But when they get inside we get into detail. Jocelyn: Okay. Shane: First course, blueprint one, second course, blueprint two, third course, blueprint three. That's when you get really into it. Don't try to sell the content. Like you said the content's free. I hate to tell everybody this. All content's free. Every piece of content that has ever existed inside of any course is somewhere free on the internet. Now, can you find it? Is it hard to find? That's where curation and courses come into play. But it's all free. You've just got to figure out how to make your free stuff look better, and your story is the best way to do that. Brian: Okay, great. Jocelyn: Okay, Brian. I think that we have some good ideas about moving forward as far as your product goes. What else do you need help with right now? Brian: I think I'm up to close to 400 people on my e-mail list. That's mainly coming through Facebook and Facebook ads with my lead magnet. However, I have not converted anybody on my e-mail list into purchasing as of yet. Shane: How often do you e-mail your list? Let me ask you a couple questions here. It's a big list. You should've converted something, so let's figure this out. Brian: Yeah. I have an auto responder set up for the first eight e-mails that follow very closely the e-mails in the blueprint. So those go out, and I follow the same timeline, so it's like a couple immediately and then about a week later and then a couple days later. And then there's one at the end two weeks out that's like, "Hey, I'm not going to send you anymore. You'll just continue to get vacation updates from me basically." And I send out whenever I have time to design a new vacation that somebody can take for free I just e-mail that to my whole list. Shane: So basically your e-mail ... So only your auto responder is what's tried to sell this so far. You've only [crosstalk 00:40:30]. Brian: That's true. That's correct, only my auto responder, yeah. Shane: Okay. What if you sent them a message that said, "Hey, I'm doing a live training this week, and I'm going to show you how to get $8,000 for free?" Brian: I haven't done that yet. Shane: Okay. You've got to add more layers to it. The auto responder is just for picking low hanging fruit, the lowest of the fruit. Actually it's like walking under an apple tree, and the apple has already fell off, and you bend down and pick it up. That's where automation comes in. You're never going to convert more than a single digit percentage off of your e-mail list, right? You have to add live Webinars. You have to add weekly Podcasts or blog posts or something. Shane: I'm also looking at your site here, and it definitely needs a facelift. It's just too plain, and it's also too ... It looks too pie and the sky. For example, let's take you. I'm going to describe your website as I go through here. One, at the top you've got all these credit cards. That's cool. Then it says, "Become a member." You know what I'm saying? It's just like okay that's cool. Then it's like a picture of four probably 18-year-old girls running down a beach. That's not Brian. Brian was a dad who had just lost his daughter and went through a dark time. And the rest of his family needed him to step up and help them climb out of the darkness, right? Brian: Right. Shane: So Brian, with his two children and his wife went forward together. I need to see a family here. That's what I need to see. I don't need to see this. Shane: Then the next one is a guy with like a mini Afro and a surf board. He's like, "Whoa, dude, I'm a cool 18-year-old dude on a beach in Thailand making six bucks a day or whatever." That's not Brian, man, I really came home from work at the restaurant and I was tired, and I knew we needed a vacation. So you're not talking to the other guys out there that are like, "Yo, I'm tired. My family really needs me to step up and figure out a way. I've not been able to afford a vacation in three years. What can I do to help my family get a little break?" You know what I'm saying? Brian: Right. Shane: It's just not resonating. The people who are on your list are just not resonating with what they're seeing and hearing in your marketing. Brian: Ah, that makes sense, okay. Shane: Yeah, yeah, yeah. Your story is not being told, and that's why nobody's buying anything from you. We tell some pretty deep stories, and we wrestled with how much of our personal life we always want to share on the Flipped Lifestyle Podcast or when we speak on stage. And 99% of the time it's be an open book because our stories are what really help someone else. And we told our stories this week. We were at FlynnCon, and we spoke with Pat Flynn on stage, and we told the story of Isaac being mistreated in a daycare center. That's a really hard story to tell when you find out someone was literally locking your child into a bathroom to punish them for potty training accidents at three years old it's horrifying to even say that out loud. But that story always makes people realize how important their kids are, how important their time is. They want to get their kids out of daycare centers and home with them. Shane: I have to tell that story because if I don't then I can't relate to someone enough to make them change their life. So your story has to take over this page. Your family has to take over this page. And you have to say to somebody, "If we did it you can do it too," and that'll resonate more as well. And then showing up live not just in their inbox is going to give you a better chance to convert those. Shane: If you could get 50 of those people to come to a Webinar, and you told us your story like the way we even talked about it off air today before the Podcast started people are going to resonate with that because they're going to look at their kids, and they're going to look at their family, and they're going to realize this guy's for real. If he wasn't for real he'd be signing up for all the affiliate things just trying to get my affiliate check, right? But he's telling me the truth, and I need to listen to this guy, and he can help me. Where do I sign up? So if you could just plant some storytelling overtop of all of this, and then do the work. And I know you're going to do the work because you're an action taker, you could turn this thing around. 400 people, man, you've got members. We just have to get the message right to do it. Shane: I'd love to see your e-mails too. We don't have time to go over every e-mail in your auto responder today, but your e-mails should be telling the story. It shouldn't just be here's all the benefits. It's like in 2018 December this happened. It moves into why you went down the path to the credit cards, and that creates trust, and it shows them like, "Hey, this guy figured it out. I can figure it out. Let's do this." Brian: Okay. Yes. Jocelyn: All right Brian, it has been great talking to you today, and I can't wait to see what you do next. Before we go we always ask our guests what is one thing that you plan to take action on based on what we talked about today? Brian: I am going to ... Since I am out of town right now I am going to set up the side-by-side course versus the membership on the website and just get that done quickly. And then when I get back home I'm going to start taking some pictures with my family and redoing my story on the website. Shane: Love it. I love that you're like, "I'm going to take some pictures with my family. We're putting them on there." That's good. And I want to see the website, so make sure you send it to me in the forums or hit me up, and I want to see the link when you redo it because it'll be awesome. Brian: Will do. Shane: Hey Brian, before we go let me ask you a question. What made you come to Flip Your Life Live? Flip Your Life Live happens in Lexington, Kentucky on September 19 through the 21st of 2019. It's our big Flip Your Life Flipped Lifestyle Podcast family reunion where all of our listeners, fans, followers, and members can come together in one place to hang out together, eat together, work together, and really get inspired to do big things for our families. I always love to hear people's stories. Why did you come to Flip Your Life Live? What made you look at it and go, "I got to go. I just got to go to Flip Your Life Live?" Brian: I wanted to dive all in. I didn't want to leave anything on the table. Really I am not afraid of failure. I am really afraid of not trying, not giving it my all. And I just felt like, "Hey, this is something I haven't done, and I can't say that I gave it all I could if I didn't go." Shane: I love that, man. No regrets, right. I'd rather have a life full of failures than a life full of regrets at the end of it. Brian: Also I'm not paying for the flight, so that helps. Shane: Shameless plug for the credit card points. I love it. That's amazing. Jocelyn: Love it. That is awesome. Shane: Listen. If you would like to join us and Brian in Lexington, Kentucky at Flip Your Life Live this year go to flippedlifestyle.com. That's F-L-I-P-P-E-D lifestyle.com/live. We have a few tickets left, but they are almost sold out, and this will be the last big conference Flip Your Life Live that we do for a while. We are not doing the event in 2020, so you can't go all in next year. You might as well go all in with us and Brian this year at Flip Your Life Live. Jocelyn: And who knows, maybe if you join Brian's membership maybe he can get you a free flight too. Shane: That's right. Maybe you can fly there too. Go to flippedlifestyle.com/live. We'd love to see you at our live event. All right guys, that is all the time we have for this week. Thank you so much for listening to the Flipped Lifestyle Podcast today. We would love to see you inside of our community as well. Who knows, you may end up right here on the Podcast just like Brian did. So if you'd like to take action today go to flippedlifestyle.com/flipyourlife and you can check out all of our membership options. Shane: Before we go today we like to close every show with a verse from the Bible. Today's Bible verse comes from 1 Thessalonians 5:16-19. The Bible says, "Be joyful always. Pray continually. Give thanks in all circumstances. This is the will of God for your life." Shane: Until next time, guys, get out there, take action. Do whatever it takes to flip your life. We'll see you then. Jocelyn: Bye. Links and resources mentioned on today's show: Brian's Website Flip Your Life LIVE 2019 Tickets & Registration Information Flip Your Life community PROLIFIC Monthly Enjoy the podcast; we hope it inspires you to explore what's possible for your family! Join the Flip Your Life Community NOW for as little as $19 per month! https://flippedlifestyle.com/flipyourlife

John Cutler is a Product Evangelist for Amplitude, an analytic platform that helps companies better understand users behavior, helping to grow their businesses. John focuses on user experience and evidence-driven product development by mixing and matching various methodologies to help teams deliver lasting outcomes for their customers. As a former UX researcher at AppFolio, a product manager at Zendesk, Pendo.io, AdKeeper and RichFX, a startup founder, and a product team coach, John has a perspective that spans individual roles, domains, and products. In today’s episode, John and I discuss how productizing storytelling in analytics applications can be a powerful tool for moving analytics beyond vanity metrics. We also covered the importance of understanding customers’ jobs/tasks, involving cross-disciplinary teams when creating a product/service, and: John and Amplitude’s North Star strategy and the (3) measurements they care about when tracking their own customers’ success Why John loves the concept of analytics “notebooks” (also a particular feature of Amplitude’s product) vs. the standard dashboard method Understanding relationships between metrics through “weekly learning users” who share digestible content John’s opinions on involving domain experts and cross-discipline teams to enable products focused on outcomes over features Recognizing whether your product/app is about explanatory or exploratory analytics How Jazz relates to business – how you don’t know what you don’t know yet Resources and Links: Connect with John on LinkedIn Follow John on Twitter Keep up with John on Medium Amplitude Designing for Analytics Quotes from Today’s Episode “It’s like you know in your heart you should pair with domain experts and people who know the human problem out there and understand the decisions being made. I think organizationally, there’s a lot of organizational inertia that discourages that, unfortunately, and so you need to fight for it. My advice is to fight for it because you know that that’s important and you know that this is not just a pure data science problem or a pure analytics problem. There’s probably there’s a lot of surrounding information that you need to understand to be able to actually help the business.” – John “We definitely ‘dogfood’ our product and we also ‘dogfood’ the advice we give our customers.” – John “You know in your heart you should pair with domain experts and people who know the human problem out there and understand the decisions being made. […] there’s a lot of organizational inertia that discourages that, unfortunately, and so you need to fight for it. I guess my advice is, fight for it, because you know that it is important, and you know that this is not just a pure data science problem or a pure analytics problem.” – John “It’s very easy to create assets and create code and things that look like progress. They mask themselves as progress and improvement, and they may not actually return any business value or customer value explicitly. We have to consciously know what the outcomes are that we want.” – Brian “We got to get the right bodies in the room that know the right questions to ask. I can smell when the right questions aren’t being asked, and it’s so powerful” – Brian “Instead of thinking about what are all the right stats to consider, [I sometimes suggest teams] write in plain English, like in prose format, what would be the value that we could possibly show in the data.’ maybe it can’t even technically be achieved today. But expressing the analytics in words like, ‘you should change this knob to seven instead of nine because we found out X, Y, and Z happened. We also think blah, blah, blah, blah, blah, and here is how we know that, and there’s your recommendation.’ This method is highly prescriptive, but it’s an exercise in thinking about the customer’s experience.” – Brian Transcript Brian: My guest today on Experiencing Data is John Cutler who is a product evangelist at Amplitude Software. I have been really enjoying John’s commentary on Twitter and some of his articles on medium about designing better decisions of work tools. If you’re in this space and you’re trying to figure out, “How do I get into the heads of what our customers need? What types of data is actually important to track?” Especially, if you’re looking at longer term outcomes that you want to be able to measure and provide insight on, I think you’re going to enjoy my conversation with John. Without further ado, here’s my chat with John Cutler. All right, we’re back to Experiencing Data, and today we’ve got the cutlefish as your Twitter handle is known, right is it cute-l-fish or cutlefish? John: We’re going to go with cutlefish, not cute-l. Brian: That’s what I thought. John Cutler is here from Amplitude Software, which is a product analytics company, and I wanted to have John on today, not because he is cute necessarily, but because I’ve really been enjoying what you’re espousing about customer experience, and particularly, product management. Which for some of our listeners that are not working in tech companies necessarily, there’s not really a product management kind of role explicitly by title. But I think some of the, as you will probably account to, the overlap between design, user experience, and product is sometimes a gray area. I think some of the things you’re talking about are in important in the context of building analytics tools. Welcome to the show, fill in, make corrections on what I just said about what you’re doing. You’re a product evangelist at Amplitude, so what does that mean and what are you up to over there? John: Well, we’re still trying to figure out the evangelist part because I don’t necessarily sell or evangelize our product, I think our product is great and I like to say it sort of sells itself. But what I’m really focusing on is helping up level teams, now that could be like our internal teams, our customers, but largely to just prospects and teams that have never even heard of Amplitude. What we’re really looking with this role is to do workshops, provide content, I do these coaching sessions with just random teams, so it’s like one hour coaching sessions. But generally trying to fill in the blanks, I think a lot of times people think, “Well, I’m just going to purchase this analytics tool or this product analytics tool,” and suddenly it’s going to answer all our questions and everything’s going to be fine. But what they don’t quite realize is that you really have to tweak a lot of things about how you work as a product development team to really make use of the great tools that are available. There are amazing tools available. I believe Amplitude is one of them, but there is so many good software as a service products to help product teams. But really at the end of the day, it’s about the team also being aligned and things like that. I really try to take a broad view of what it will take to help people make better products with this role. Brian: Yeah. Can you give an example? I think I know where you’re going with this, but give an example of where someone had to change their expectation? You need to change the way you’re working or let’s figure out what’s important to measure instead of just expecting. I think you’re alluding to like, “Oh, buy our tool, we know what the important analytics and measurement points are that you should care about and we will unveil them.” Instead it’s like, “Well, what’s important to track? Does time on the site matter? Does engagement in the application matter? Does sharing matter? What matters, right?” Can you talk about maybe where there was a learning experience? John: Oh, absolutely. I think maybe a good way to describe this as well is a lot of the learning, a lot of the questions begin way before the team is unwrapping the problem, unraveling the problem. I’m not sure this answers your question exactly but I think we could lead into something more specific. But imagine you’re a team and someone says, “It’s the second half of 2018, what’s going to be on your roadmap?” You think about it and you know what you know and you’ve heard customers tell you things, and the CEO of the company has subtly but not so subtly hinted he’d really like to see X or she’d really like to see X. You put together this roadmap, and at that point once you’ve got people thinking that those solutions are the right solutions, and you force that level of convergence, there’s not a lot of… measurement will not save you at that point, you’ve already committed at that point to deliver those things in that particular setting. One example of a practice that might change to further or amplify the use of measurement would just be not making… committing to missions, committing to move particular metrics that the company believes are associated with mid to long-term growth of the company, and commit to those things instead of committing to build features. An example, a real world example, maybe for someone’s effort, maybe what you’re shooting at before is do they shift from same time on site was important to something else? But for a lot of these teams, it’s shifting from build feature X to something like shortening the time it takes for a team to be able to complete a workflow. That’s the big shift for that. It’s nothing-to-something that makes sense, not necessarily even something-to-something. Brian: One of the things we talk about on the show is designing for outcomes instead of designing outputs. John: Yep. Brian: Because it’s very easy to create assets and create code and things that look like progress. They mask themselves as progress and improvement, and they may not actually return any business value or customer value explicitly. We have to consciously know what the outcomes are that we want let alone measure them. Do you run into the problem when you… If you’re coaching someone and getting them into this mindset of designing around an outcome and building your sprint or your next, maybe it’s even a strategy for the next six to 12 months around outcomes? That the important things to measure are not quantifiable in the tool? Do you work yourself out of a customer sometimes because the tool can’t actually measure what’s important? Does that ever happen? John: That’s a great question because I think that I do a fun exercise with people, which is called let’s predict the success of a relationship. We start with this activity and we just we forget about what we think is possible to measure and we just start mapping our beliefs. The team will say something like, “Well, I think that they shouldn’t have arguments.” Then someone will say, “Well, yeah, but it’s not just,” and maybe they’re talking about their own life like, “Well, we argue a lot, but we resolve our arguments pretty, we become stronger once we have the arguments.” Then the team will sit there and go, “Huh, okay.” It’s not just about the number of arguments, it’s ability to resolve your arguments. Brian: Resolve. John: We keep playing this game and we map our beliefs out to predicting these things, and some of these things we have more confidence about and some of these things we don’t have a lot of confidence about. Some of these things we strike and we get this big messy network of nodes and edges on the wall and that’s what we start working with. What’s really, really interesting is that we actually, as a company, there’s almost always some percentage of these things that we can contribute to in terms of what they can instrument in using our product. It’s not like…we would much rather our customers map the universe of things and acknowledge some things that might be difficult to measure or they’re just beliefs at the moment, they haven’t figured out how to measure them. Because really what Amplitude is very powerful at is doing behavioral analytics about these long standing customer journeys through products and those types of… Anyone who’s done a 15-table join and tried to communicate it to other people in your company and then tweak it and have people collaborate with it just knows how painful that is. That’s the type of pain that we solve. But back to the particular question, all the coaching really centers around mapping all the beliefs, and we’re usually confident that there are ways to measure some percentage of those things using our product, and that’s fine by us. Brian: There’s almost like a meta-question, right? John: I like, I’m meta, yeah, I got it. I’m there with you. Brian: You’re like analytics, you’re an analytics product and you talk to your clients about what’s important for them to measure. But then at some point, you have to know what’s important to measure to know that your customers are getting the value. John: Yeah. Brian: Is it directly…are you interested in what they’re setting up to measure and then that becomes your measurement? Do you piggyback off that or do you… How do you justify that the sprint or the epic we worked on last quarter provided business value? How do you…? John: Yeah, that’s amazing. Yeah, we definitely dogfood our product and we also dogfood the advice we give people usually first. To give you an example like in 2018, we had this North Star Metric called “Weekly Querying Users”, WQUs. That seemed about right and we did some analysis and it looked like, “Well, for increasing WQUs, it’s probably going to mean this and this and it’s going to be some early indicator that our monthly recurring revenue is going to keep going up”, etc. But there were obvious problems with that and we saw that. And as 2018 went along, we started to look at it more, and for any SaaS company, there’s a point at which your expansion within existing accounts starts to be really, really important in terms of percentage of revenue that you’re in. We thought, “Well, is that metric, can you hand WQUs to any new team member and say move that or move something that you think moves that,” and then be 100% confident they’re going to make good decisions? It broke down after that. What we did is we shifted to weekly learning users. Now a weekly learning user is not just someone querying, because anyone who uses one of these tools knows you could just sit there and query all day and not get an answer. In fact, querying more might indicate that you are not getting an answer. Not like doing anything with it. A weekly learning user is actually someone who shares some piece of digestible content whether it’s notebook, whether it’s a dashboard, whether it’s a chart, and they share it. We actually have this North Star, which is weekly learning users, we believe these three inputs drive weekly learning users and those are activated accounts. They need to know what they’re doing, they’re broadcasted learnings, which is the ability for the user to attempt to broadcast some number of learnings, and then a metric that is a consumption of learning metric which is the broad consumption across the organization of that particular piece of learning. This is all sounds really heady, why would we go to all these lengths to do this, and Weekly Querying User sounded good. But to us this really encapsulates a strategy. I think that that’s an important thing that a lot of people from pure analytics backgrounds or who are used to sitting with a queue of questions and answering those questions are maybe not used to the idea of moving towards a cohesive strategy as expressed by a number of metrics and the relationships between those metrics. That’s something that we really encourage our customers to do, it’s not data snacking. It’s not like, “Oh, I got this itch today so I’m going to answer this question.” That took a lot of work to come up with that, and we’re confident about those relationships between those things. But more importantly, it helps any new team member like all you need to do is show a skilled product manager or a skilled designer or a developer even and say, “This is our current mental model as described by the relationship between these things. Where do you want to slot in? What do you have in mind?” That’s really, really powerful. I don’t know if that roundabout way of saying we take this really, really seriously. Brian: If I can sum this up, and I’ll need you to repeat part of it, but you have monthly querying users, so what I take that to be is I, the customer, using, paying for the Amplitude software, a querying user means I went in and I looked for content or I literally used a search interface to probably look up an analytic or some stat. You moved away from the number of people doing that and how often they’re doing it as a measurement of your company’s success to this three-stage kind of thing that I heard included sharing some knowledge. But can you repeat what those three grains were? John: Oh, yeah, sure. The North Star is what we call “Weekly Learning Users”, so WLUs. Those are users performing the behavior of interest, which is sharing, distributing some piece of content. Then we believe there are three inputs that explain that metric or three inputs that we really focus on. One is that the accounts are activated, which are meaning that does this account just have a minimum number of people doing that? The next one is broadcasted learnings, which is me, “is the initial attempt to broadcast the learning?” Then consumption is the actual long tail consumption of that particular learning. Let’s say it is a story like I sign up with Amplitude, no one’s really using it all because we haven’t really onboarded and we haven’t really instrumented, we haven’t done any of that stuff. Okay, well, then we get that done, so we get just that we’ve activated, we have at least a certain number of users learning, some amount. I’m in the tool, I’m in a notebook that is really interesting that I’m putting together that tells a story with data, very interesting about the mission that I’m working on. I attempt to invite people to that notebook or get them involved, that’s the broadcast. Then, finally, the consumption of learning would be the accumulated interactions with everyone with a notebook. If that sounds too complex… Brian: Got it. I don’t know, I- John: But the whole idea is for people listening and I think especially folks, designers and other folks is that their experience with analytics might be something very simple like “what percentage of people used feature?” Or something. What they’re not getting is the context, the relationships, and what I’m describing here, there’s amazing belief networks, there’s causal relationship diagrams, there’s just simple stickies and string on the wall, whatever you want to call them. But we’re describing our beliefs as it relates to the data, and I think that, that’s really important. For some background too, I’m not a data scientist, I’ve been a product manager and a UX researcher and that’s been my focus for a long time. It’s not like I’m a pro at this stuff, and even for me, though, it grounds me in what I’m working with and makes my analysis a lot easier. Brian: I imagine you may have some, not resistance, but when you’re working with quote data people or analytics people or data science people in your staff, in Amplitude, are there routine things that you wish they would hear that would sink in or problems that maybe they’re not aware of that you think they should be like, “We need to look at the problem differently.” Maybe you encapsulated that and that’s why you have this three stage thing as a reaction to the data snacking mentality, which is “What data do we provide? Great, they have it, now they can eat it.” Is that their reaction to that or are there other things that… I’m thinking of our listeners, we do have data scientists and analytics type people, and I’m wondering if you were to work with them, it’s like, “Here are the things that I want you to think about here to get our head a little bit out of the tech for a second and into the decision support mentality.” Anything, what would you espouse or advocate? John: That’s a great question. I think I can answer it a little bit with a story. I was the PM for search and relevance at Zendesk, like support software. My background is not in information retrieval or the guts of search but very, very early on working on a team with very, very talented people, data scientists, data engineers really, at the end of the day. One thing that I very much advocated for is we needed to be able to get everyone in the same room, we needed to get the people who were experts in what I would just call the actors, the support agents, or the support managers, or the the person trying to get help on their Uber app. There’s experts in that, there’s domain experts. There’s also people who are experts in the surface area, the surface, like the interface. There’s people who are really, really good at searching or finding information on mobile. There’s people who’s very good at finding information on, in our case, like the support agents view in their web browser. Then you had our people who are really smart and creating data as it related to search and they were great at data engineering, etc. The main thing that I noticed was that there’s just a silo-ing, and the people on my team were just craving, craving to be sitting next to someone who understood these other things really well. I think that for a lot of listeners it’s probably you know that, you know that from a first principles angle, you’re like, “Well, I know that there’s a bigger picture here.” I know that just in our case of searching like we knew that raising the mean reciprocal rank of a search term, we are searching it, where does the person click? Do they click on the second item, the fifth item. In theory, raising that would make a difference but when we look more broadly, it really didn’t relate to deflection of tickets and things like that. Our traditional metrics, the way we were measuring success is locally related to search. If we broadened our horizon to what makes a difference for the human beings out there who need their support tickets resolved or the support agents or things, that perspective was so helpful. What I would say to the folks on listening, it’s like you know in your heart you should pair with domain experts and people who know the human problem out there and understand the decisions being made. I think, organizationally, there’s a lot of organizational inertia that discourages that, unfortunately, and so you need to fight for it. I guess my advice is fight for it because you know that that’s important and you know that this is not just a pure data science problem or a pure analytics problem. There’s probably there’s a lot of surrounding information that you need to understand to be able to actually help the business. Brian: Sure, and you’re echoing sentiment I had a Data Center from the Broad Institute on, he was mentioning how much he’s like, “My work is so much more powerful when I have a great domain expert with me who really knows the space.” We met over music, I’m a musician as well and he was trying to explore creativity in the context of jazz. He’s a enthusiast in terms of music, he’s not a musician, but he’s an enthusiast so he understood some of it but he didn’t have the lingo. It’s just interesting when you look at someone working in that space trying to answer a question about like, “How does creativity work in jazz?” They don’t have all that domain lingo. Being on for a change, being the domain expert, it was fascinating for me to be on the other side because usually I’m the hymn advocate, even though I’m not a data scientist, as a designer and a consultant, we deal with this all the time. It’s like, we got to get the right bodies in the room that know the right questions to ask. I can smell when the right questions aren’t being asked and it’s so powerful so I totally agree with you on the need to provide that bigger context sometimes so you don’t just- John: Jazz is just a mistake played more than once, right? Brian: Yeah. Oh, there’s tons of them, there’s no wrong notes, just bad choices. John: It’s very easy for them to create the model for that. You’re just making a mistake and play it more than once. Brian: Exactly. John: Then you go back to the top. Brian: Exactly. Well, even that, like play the head again. Well, what’s a head? Oh, okay. Well, it’s just one form of the tune and they cycle through it and play chorus. Well, what’s a chorus? Okay, shit. But even having that, you can imagine that on the business client, this was like a fun side project he was working on. But you can imagine that in a business context where you don’t even know what you don’t know yet about it yet. I hear this as happening, they’re still in the, especially, in the non-tech company space, the more traditional companies that are, “Oh, we have 100 years of data and let’s go, we need to go buy some data scientists and throw them at this pile of data and then magic will come out the other end.” John: Oh, I think that that happens in tech companies, too, though. I think that that’s the number of data scientist friends who’ve been hired in is like some large effort. Then, one, they’re like, “Yeah, and data engineering was the actual problem.” Okay, we spent our first year there just going around in circles on solving that problem, and then, yeah, the number of friends I have who’ve been frustrated by that dynamic, even in tech companies, I think it’s a pretty common, more common everywhere than we would think. Brian: Tell me a little bit about, so we’ve been talking about the analytical part of all this, the quantifiable parts largely but you have a UX research background as well. We talk, on this show, we talk about empathy, we talk about the needs to go talk to people to ask good questions, to ladder up, get into all that. How does that fit in? When you’re working on an analytics tool, can you fill us in on your approach to qualitative research and more the soft, mushy stuff that UX people deal with? John: Yeah, and it’s interesting. For context, I’m not a UX researcher at Amplitude but I’ve done that in prior environments that required the chops. But in talking to teams and doing it, I think so many of the basics apply in the sense that you’re really… Not to overuse the jobs-to-be-done stuff, you’re really, really trying to understand what decision this person is hoping to make. You’re really trying and then what impact that decision has on the rest of the organization and who is involved in it. I think anyone who’s done this knows that even as a UX researcher, if I do like a co-design activity with customers related to anything analytics oriented, it’s just, “Oh, we’re going to do an Excel mock up or you know.” Anytime you get customers involved with that, it’s so easy. If either side, and I’ve been on both sides of this, it’s so easy to forget what you were trying to do. I think that has a lot to do with the exploratory aspect of data in general that we have a gut instinct that if we just saw this stuff organized like this, then it would somehow be valuable for something we have to do. I think that for, and I don’t know if it answers the question, but I think it requires the same chops but also understanding that people just have a hard time, users have a hard time talking about what they are looking at and what they’re hoping to get out of the data when they’re looking at it over and over and over. I think that really, it really you have to use all the tools in the tool shed. To give you an example, there was… I don’t know if you’ve done these things too, I’ll do these exercises where it’s like, “Okay, we’re revamping the app, it’s just going to be this mobile browser with three numbers on it.” That’s it, that we’re not going to have all these fancy charts, we’re not going to have all this stuff. And three numbers and then one piece of narrative advice, like “Consider this or do this.” I love activities like that from a UX researcher standpoint when I’m working with people because it really, really forces them to just get out of their own head to think about it. That’s like a common trick and you probably have a lot more. But, yeah, I don’t know if I answered the question but it’s a lot of the same tools. But I think also you have to really… It’s a job environment, they’re making decisions, they’re hiring these analytics to do a job. But then with this added layer that I think that people are just incredibly, they find it incredibly difficult to talk about the numbers that they’re looking for. Brian: When you say it’s difficult for them to talk about it, are you talking about their digestion of what’s on the screen or their expression of what’s important to them to actually find out? What do I actually want to learn about? Is it… John: Both really, and that’s the thing that I think just makes it doubly as hard. It means that if you show them something, and I think that we can all relate to it too, like any of us who have been shown some mock or some prototype of information on the screen, you can see your gears turning. You’re having to process it and where did this come from? Can I trust it? What is it? We see that all the time just in Amplitude, it’s people… Our understanding of how people experience some of these querying screens that we have, when you actually ask them to just talk through what they’re thinking about as they move through it, it’s just it’s so complex. Data trust, where is this stuff coming from, data over time, their challenges with certain visualization techniques, even if it’s “the right technique” like, “Well, I just need a radar chart.” Just like no you don’t really. But that’s how they’ve been anchored or whatever. It’s just complex. I don’t have a fancy answer, it’s just complex. Brian: What you just told me reminds me of you had mentioned you do this exercise, and I’m wondering if it’s the same exercise that I’ve done as well with analytics tools, especially, in the context of monitoring applications. There’s some system that’s monitoring stuff and it’s supposed to advise you on what should I do next or what happens with something like this? It’s like “instead of thinking about what are all the right stats to do”, it’s “write in plain English like a prose format what would be the value that we could possibly show”, and maybe we can’t even technically do it today. But it’s “express the analytics and words like you should change this knob to seven instead of nine because we found out X, Y, and Z happened. We also think blah, blah, blah, blah, blah, and this is how we know that, and there’s your recommendation.” It’s highly prescriptive but it’s an exercise in thinking about the customer’s experience. How close to that can we get to it, where I don’t have to infer from charts or whatever the date of this format is, how close could we get to something that prescriptive and then try to work backwards from that. We probably can’t get right to that full prose. Is it something like that where you jump to this conclusion, like value conclusion or something like that? John: Yeah, and I do a couple of these like that, one is if I have an Alexa or if I have a tube of crackers or whatever I’m like, “This is the interface now.” You can ask Alexa, that’s your interface. This is a beautiful future world where you just have your smart person, your smart assistant to do these things. Yeah, similar type of, I think, what it does is it creates just enough dissonance to snap people out of just immediately trying to unravel the visualization, which can be I think all of us do that. I think that that’s our instinct whenever we look at something like that. Brian: The default next question is how should we visualize this data that we’ve captured? That’s the itch that we may not be the one to scratch? John: Yeah, but I think that’s also what we can test with, that point, when we’ve got that need to fill, that’s when we can try multiple approaches, I think to see that. That’s my experience, there is that point at which you need to you go back to the drawing board. Although, I would say that depending on the subject, the user in that case or the person you’re working with, some people are really, really good at just the co-design aspect. I don’t know your experience with that, but it seems to have a lot to do with what the people do each day and how they think about visualization and stuff. But I’ve done co-design sessions with people who the next step was, “Well, let’s start thinking about, let’s start drawing, let’s start doing some other things to do it.” I think that depends a lot on the background of the people that you’re working with. Brian: If you were starting over today with Amplitude, is there either a… Not necessarily a feature you would change but is there something that you would approach differently? If someone says, “Hey, we have this JavaScript widget, you paste it in your, all your app or whatever, and we can track almost anything, any activity, whatever. What should we show?” Is there something you would change about maybe how you guys went, the process you went about arriving at the current product that you have? John: That’s interesting. I wish Spencer and Jeffrey were here to answer because they’re the founders of the company. But I think that it’s funny how products have their history about them, so Amplitude, for example, it was a Y Combinator. The founders didn’t go to Y Combinator, they had this fancy voice app or something that they were working on, and this was actually just their effort. They were like, “Well, we kind of had this app,” and they surveyed what was available and then just said, “We really need, there’s a thing, it’s a little different. It’s like an event based measurement thing. We really want to instrument this app and know whether people are using it or not.” That was the founding story, it wasn’t their key thing. A lot of the early customers were folks from Zynga or Facebook or other places that had moved on to other startups and then they wanted something that helped with the 90% of product questions that they had around retention and engagement and complex behavior patterns. Does this behavior predict this or is there a relationship between these things? That’s the founding story, these discerning teams that had a fair amount of autonomy and were tasked with working in these environments and that they wanted a product that they could do that with. When I’m thinking about what I would change as the newcomer to the company, now maybe five years on, was it, yeah, or six years or seven years on, I think it’s what they’re starting to do now, which is interesting. This notebooks feature to me is just so, so, so good and it gets away from a traditional dashboard. But with a notebook, it’s very similar to a data science notebook, you can weave this story and this narrative and you can make the charts live and you can communicate it and you can do those things. As a product manager, that is pure gold to me, and it’s just we’ve started to do those things. I think that the answer would be more of what they’re really digging into now, which is around this learning user concept and how do you create stories with the data to motivate your team and keep everyone aligned and things. I think if it hadn’t existed and I joined a year ago, I would have been like, “Oh, you’re missing this little element like the actual part that integrates it into day to day product development.” But they’ve just started doing that now, so they stole my answer. Brian: Nice, and just for people that don’t know, tell me if I got this right, but the notebooks for people that aren’t data scientist, it’s effectively a collection of both quant data like maybe charts or tables, stats, data collection that you guys have put into some visualized widgets or whatever it may be insights plus qualitative stuff like my commentary on it. Like “Why do we care about this? Well, design is currently tracking these metrics because we’re running a study on dah, dah, dah, and we think we can move this up” and that’s a proxy for this other thing. You can provide all this context in that storytelling mentality so that when someone new comes in, they’re like, “Why do I care about time on site or whatever the metric?” John: Exactly, and that’s the huge thing. One thing that we learned, we’re in this business of teams getting going and it’s like it’s so easy to get to the point where you’ve instrumented your products and any new person joining your company can’t make heads or tails of anything. It’s like you’ve got all these events, are these duplicate events? We’ve invested a lot of time in this taxonomy feature, which helps manage your taxo- It’s way, way, when people try to build this stuff in-house, they just forget about all that stuff. Like, “Oh, it’s just events, it’s semi-structured information, we’re going to put it here and then we’re just going to run queries on it.” But all that’s really, really important, so back to the notebooks thing, one of the biggest use cases we’ve seen in notebooks is people using them to onboard people and orient them with all the available analytics that and metrics and things that are being recorded. That’s actually a really good testament to show that need. Brian: They use it to actually show how they use Amplitude at the- John: Right, it’s pretty meta. Brian: Wow, that’s awesome. John: Yeah, we see them do that or even some of them use it for training like, “Okay, let’s start with this idea that we’ve got this whole universe of users. Well, how would we segment those? Well, here are the key ways that we segment.” Okay, that we’ve gone down one layer, and so I think that that’s kind of cool. But, yeah, for people who don’t know about these data science notebooks, it is a mix of qualitative, quantitative, you can embed charts that are live or you could embed point-in-time charts, you can make comments, and you can do various things. I think for a lot of people who don’t do this for a living, they get intimidated and it’s not, a lot of the stuff is not rocket science, but it’s just annoying to have to go to someone in your company and say, “Hey, can you spend like three or four hours just explaining our information to us.” That’s really hard to do, so these notebooks help with that particular thing. I think that type of stuff is really the future of moving away from just very, very stayed dashboards and things like that. Brian: Right. I don’t know if there’s much in terms of predictive or prescriptive intelligence in the tool, does the tool provide that as well or is it mostly rear view mirror analytics? John: It’s interesting you say that, so we have this new feature called Impact Analysis, and so in Impact Analysis you are able to go from day zero of a particular use of a particular feature and then see the impact that it has on another set of things. We give some statistics and we give some other values in there. So we’re middle of the road moving to more and more complex questions. But one thing that our team realizes that anything… To prevent people from making bad decisions or making poor statements, you need to be so, so, so careful about presenting what you’re actually showing if there’s a correlation between something or even implying that there’s causation without doing the background on it. We’re not completely rear view and we’re in this middle ground, but we’re also going to go on record and say we’re predicting what this value’s going to be in six months. Brian: Right, and the reason, and not just the hype of machine learning, blah, blah, blah, that’s not my main reason for asking was going to lead into my next question, which was do you struggle at all with the expression in the tool of the evidence that backs up any types of conclusions that you’re showing? Do your customers care? Well, how did you guys arrive at this? John: They absolutely care, and so like one of the… We spent a lot of time in the ability, in Amplitude, any data point that you see, usually, if you hover over it, there’s a message it says, “Click to inspect,” or you can create a cohort off of that or you can see the paths to that particular thing. What we really made this effort to do is exactly right, is that people… Working at two analytics companies now, Pendo and now Amplitude, data trust and people being able to unravel what that number means in a way that makes sense to them seems like one of the massive limiters. It’s just that thing that it’s best laid plans start, that’s the entropy that exists with these tools as people use them more and more. There’s just it gets messier, a bunch of hands, a bunch of people are playing around. At least with Amplitude, they try to make a really big effort to like if you want to understand why that number is there and what is behind it, we try to make that really easy. John: But we could always do better because in my mind this is the number one difference between the more data snacking approach like “it kind of looks interesting, that number,” something that you can really pin your business on, which I think is what people… That’s the dream of all this, but then once people start to ask good questions really, it really challenges the tool. Brian: John, this has been fantastic chatting with you, I really appreciate you sharing this with our listeners. Do you have any parting wisdom or anything you’d like to share with people that are maybe working more on the tech side or the data side of the thing and the vents and they’re trying to, “I want to produce more use, whether it’s reports or actually software applications. But we’re trying to provide better stuff, more engaging, more useful…” Any closing advice you might give to someone like that? John: I’m going back to what we were talking about from the UX research angle is that I think that in this area, there’s so much temptation to any one of us who’ve done this is that there’s this constant push and pull between customizability and then this promise of preemptive insights like smart system, it’s intelligent, it’s doing these things. Then so how prescriptive are you? Is what you’re presenting and actually helping someone to do their job. I think that it’s probably reflective of my learning at Amplitude is that really going to human centered design, like really thinking about if the person is able to effectively do their job and really able to answer the questions that they’re answering. I think that what happens is all of us want that, but then we hit this wall and we start to get really some conflating information from users and we start to… Then we’re like, “Well, okay, we’re just going to let them find what they want to find. I think that, that exploratory type of research should be something that’s possible in these tools. In fact, I think that leads to asking some of the best questions when users can do that. But I would really hope that people don’t abandon the idea of being really patient and seeing if before they just throw their hands up in the air and will say, “Well, we’ll just make a query builder and that’s it, that’s it.” Like really seeing if that thing can solve the problem. I don’t know if that makes sense, but I think it’s something that’s really been on my mind a lot lately. Brian: Yeah, I talk about sometimes like with clients and people in this space about knowing whether or not you’re producing an explanatory product or an exploratory product. It doesn’t mean you can’t necessarily have some of both but there’s a big difference between the value, like in your case, I’m guessing a lot of these people really want some explanations when they tell us about what we can do to make our software better. They’re not there for fun, but they might run across some things they didn’t know were possible which begins the questioning. But if you put all the effort on them, you’re just shifting the tool effort over to the customer. You’re making it much harder for them to get the value out at which point they may abandon or quit. It’s not just knowing are we explanatory or exploratory or at least there’s this feature or there’s this outcome that this goal that we’re working on, the sprint. But just being aware of that I think is part of the challenge. Like should they be able to walk away with… I should be in the six to 19 apple’s range, whatever that means, like, should I be able to walk away with that level of clarity or not? I don’t know. John: I think that it’s also something like, that’s interesting you said that, because a lot of features that we’re experimenting with, one thing that Amplitude does is anytime you… We built an undo feature, so we try to make it really easy to go really deep and then just back out really gracefully. It’s like infinite, every version of the chart as you work on one is saved. You can back out of it. There’s a lot of features like Save As or you’re built like you could go to someone else’s chart, and if you have some idea of where you want to take it, you could edit it. But you’re not editing their chart, you’re editing a copy and you can think about it. But back to that point is I think that there’s many things that you can do to encourage, that you can juggle those needs concurrently for having definitive things and then also encouraging exploration. We’ve found that with our product as we experiment more. One, I just told you about it, like the ability to telescope into a metric and then do more exploration around it. That didn’t exist before and then we were like, “Oh, well, how about when you hover over any data point and you allow them to inspect that or explore that?” I would say that there are ways to accommodate both at least from our perspective and what we’ve learned. Brian: Right, and I think there’s always some of both of that, and I don’t think most people are going to take everything on its face value. But I hear what you’re saying. One of the things I’ve been recently working on is a UX framework for this called the CED framework, just conclusion, evidence, and data. It’s not necessarily a literal expression of “Where should the screens go? What goes on every screen?” But the concept that when possible, if the tool can provide conclusions with the second tier of being the evidence by which the tool or application arrived at this conclusion. Level three might be really getting into the raw data like, “What are the queries? What was the sequel that actually ran?” Or whatever the heck it may be, there’s times when maybe that data is necessary early on a customer journey. It may just be, “We need to build trust around this stuff.” We can’t be totally black box, but we don’t actually expect people to spend a lot of time at the D-level. We really want them to work in the C level, but it’ll take time and evidence is required sometimes if you’re going… Especially, I got to go to the boss, I can’t just tell him it’s 18, we should be at 18, not 12. It’s like, “Well, how did you arrive at that?” John: We find a lot is the instrumentation rigor is like that’s one of our big problems to solve really is there are these products on the market that do just try to record everything for it. There’s a lot of entropy there and there’s a lot of issues. They’re very fragile, in some ways, so we as a company definitely believe in explicitly instrumenting these events. But at the same time, you’d be amazed how many product teams… There’s this thing called a user story, you write a user story that’s from the user’s perspective, what are you trying to do? Now you would think that like, “Okay, well, we’ll tack on to the acceptance criteria for any story that you’ll use a noun and a verb, and you’ll get these properties and you’ll get these things. Integrating instrumentation on the product level, not necessarily like, “Okay, we’re instrumenting how our servers are working or anything,” but just, “What did the user do?” That’s still relatively new. People who’ve worked in environments that just do that as second nature that, okay, they’re in another thing, but we find that companies even need to change that approach. You’ve mentioned your CED thing like what’s interesting is that extends to the UX of instrumenting. It’s pretty interesting from that, it’s you’re the user trying to draw some conclusion, you’re doing these things. But it’s almost like service design, in some sense, because you need to design the approach to even instrumenting this stuff. It makes your head hurt sometimes. Brian: Yeah, all this stuff makes my head hurt. But that’s why we have conversations, hopefully, we’re knowledge sharing and it’s like giant aspirin conversations or something, I don’t know. But I found this super useful, thanks for coming on the show. Where can people follow you? I know I found you on Twitter. I forget how but what’s your [crosstalk 00:47:23]- John: Twitter is good, I’ve installed a Stay Focused app to prevent more than 20 minutes a day on Twitter. But you will find me eventually there. I write a fair amount on Medium and it’s pretty easy to find me there. Brian: Okay. John: If you just type in “John Cutler product”, I have about 400+ posts on Medium. Some are better than others but- Brian: Awesome. John: … yeah, that’s the best way for right now. Brian: Awesome. Well, I will definitely link both of those, your Medium page and your Twitter up in the show links. Man, John, it has been really fun to chat with you here. Thanks for coming on the show. John: Cool. Yeah, thanks for having me. Yeah, awesome. Brian: Yeah, super. All right, well, cheers. John: Cheers, bye-bye.

Paul Mattal is the Director of Network Systems at Akamai, one of the largest content delivery networks in the U.S. Akamai is a major part of the backbone of the internet and on today’s episode, Paul is going to talk about the massive amount of telemetry that comes into Akamai and the various decision support tools his group is in charge of providing to internal customers. On top of the analytics aspect of our chat, we also discussed how Paul is approaching his team’s work being relatively new at Akamai. Additionally, we covered: How does Paul access and use internal customer knowledge to improve the quality of applications they make? When to build a custom decision support tool vs. using a BI tool like Tableau? How does Akamai measure if their analytics are creating customer value? The process Paul uses with the customer to design a new data product MVP How Paul decides which of the many analytics applications and services “get love” when resources are constrained Paul’s closing advice about taking the time to design and plan before you code Resources and Links: Akamai Twitter @pjmattal Paul Mattal on LinkedIn Paul Mattal on Facebook Quotes from Today’s Episode “I would say we have a lot of engagement with [customers] here. People jump to answering questions with data and they’re quick. They know how to do that and they have very good ideas about how to make sure that the approaches they take are backed by data and backed by evidence.” — Paul Mattal “There’s actually a very mature culture here at Akamai of helping each other. Not necessarily taking on an enormous project if you don’t have the time for it, but opening your door and helping somebody solve a problem, if you have expertise that can help them.” — Paul Mattal “I’m always curious about feedback cycles because there’s a lot of places that they start with telemetry and data, then they put technology on top of it, they build a bunch of software, and look at releases and outputs as the final part. It’s actually not. It’s the outcomes that come from the stuff we built that matter. If you don’t know what outcomes those look like, then you don’t know if you actually created anything meaningful.” — Brian O’Neill “We’ve talked a little bit about the MVP approach, which is about doing that minimal amount of work, which may or may not be working code, but you did a minimum amount of stuff to figure out whether or not it’s meeting a need that your customer has. You’re going through some type of observation process to fuel the first thing, asset or output that you create. It’s fueled by some kind of observation or research upfront so that when you go up to bat and take a swing with something real, there’s a better chance of at least a base hit.” — Brian O’Neill “Pretend to be the new guy for as long as you can. Go ask [about their needs/challenges] again and get to really understand what that person [customer] is experiencing, because I know you’re going to able to meet the need much better.” — Paul Mattal Episode Transcript Brian: Hi. We’re back with Experiencing Data here and I have Paul Mattal on the line who is currently the Director of Network Systems at Akamai. How’s going, Paul? Paul: It’s going great. Thanks, Brian. Brian: I’m glad to have you on the show and you’re working at one of these companies that I think of as kind of like oxygen in the internet. It’s everywhere but you don’t really see it because it’s all invisible and that’s actually this big thing behind the scenes. You’re swimming around the internet as all these data and Akamai’s in the middle of all of a lot of that, largely responsible for making sure it’s moving quickly and is available at the right time and in the right places. As I understand it, you’re in a new position, you’ve changed domains, previously you were working in the space of legal patent work, digital forensics, and you built some tools that your previous company makes. You can tell us a little bit about those. Now, you’re moving more into the bits and bytes of the internet and you’re responsible for creating data products like decision support tools for people that keep the Akamai network going and running smoothly and anticipating demand? Did I get all that right? Paul: That’s exactly right. At Akamai, we like to think of it as we’re the ones that make the internet work. There’s a notion that the way things work on the internet is you just simply put your content up on a server and the rest is history. But these days, there’s a lot of complexity. There are many, many users who want access to the same content at the same time. Akamai makes that content all available to everyone when they need it and how they need it. In my past job, as you mentioned, was quite a bit different, although it had some similar qualities. I was helping to develop systems and tools for lawyers and for consultants for lawyers, in some cases to analyze patents, to help them better understand their subject matter of patents, so we’ve created some applications there. Here at Akamai, I’m also creating applications and tools to be used by the members of the network’s team who are responsible for deploying and maintaining the whole Akamai network. That breaks down roughly into tools that help us manage our work, tools that helps us with analytics and planning, and also tools that help us visualize data. It is somewhat of a shift. A lot of the domain knowledge is different, but it’s interesting that so many of the problems end up being similar. Brian: Tell us a bit about who the end-customer is. How many internal customers do you have? Do they break up into personas or segments? Like you have network administrators and you have whatever people. Tell us a bit about who those people are that you’re designing these tools for or you’re helping deploy these tools for. Paul: There are a couple of groups. The infrastructure group which is responsible for really deploying all of the servers and maintaining all of the servers. That’s a set of one class of user who is mostly using our tools in a logistical fashion to coordinate and organize their work. There’s a planning team who is thinking about the capacity of our network: Do we have enough for what’s coming down the pike? Do we have the right capacity in the right places? We also have users who are thinking about the architecture of the network and thinking about how we build and optimize our hardware and our network, to continue to be cutting edge and to continue to meet the needs of our customers. So, different people looking at different tools and different data for different purposes. Brian: Cool. Just a little fun question here. This is probably because I don’t know the domain very well. When there’s a big event coming on the internet, let’s take something like the Super Bowl, or the World Cup, or the new Game of Thrones, or whatever, are there literally changes that you guys go and make to facilitate a major event? Or are those actually more like a blip in terms of internet traffic and all of that? Paul: It depends. Certainly, some of those events have been some of the largest data traffic we’ve seen move across our network. Often, there are considerations especially depending on where exactly we expect the viewers to be for those events. We may deploy additional capacity in one geographic area or another. Brian: Going back to the people that are the end of these tools—again, these are decision support tools—how do you know if your team is doing a good job? How do you measure that the end-customers are getting the right information and they believe it, that they’re willing to take action on it? Do you a regular feedback cycle or interaction with these different personas that you talked about? Paul: Yes, That’s one of the most important aspects of what we do is trying to figure out how to measure, how exactly to measure how we’re doing, especially in the analytics space, right in the productivity tool space is a little simpler. We can tell pretty much where the pain points are. People come to us and say, “This interface isn’t working for me or these five things are in five different places,” and they’re going to use them as one. Those are a little bit more straightforward kinds of feedback. With analytics, we find it goes a lot to how successful were we predicting, how much excess capacity did we end up within a place we didn’t need it, for example, and all those kinds of questions. We meet with our customers pretty regularly and we also have some metrics that we compute to give us an idea of how we’re doing. Brian: Are those quantitative then? Those are all quantitative metrics or do you have any type of qualitative conversations that go deeper than like, “I wish there was a filter for the date on this chart,” or stuff like that. Those things do matter and it’s the sum of all those little, tiny details that add up into good experiences typically, but I’m curious if you have any deeper qualitative type of interaction with these end-users. Paul: A lot of what we’re discussing these days, for example, is there’s a tremendous amount of telemetry available that comes off the platform. Numbers about what’s going on in the network that could measure and we could capture. In many cases, a lot of the conversations are about, “Hey, can we capture more of this data? Is there’s somewhere we can get sample more frequently?” or, “Can we get access to this kind of data that we don’t have right now, so that we could be able to optimize more effectively on the things that actually matter, where the actual bottlenecks are in the network,” versus more simplified models based on less data. We’re finding that’s one of the very common kinds of feedback we’re getting is for more data and differently sampled data. Brian: We talked about this a little bit when we did our pre-call on whatever about topics and you mentioned that you have different classes of users in terms of who’s capable of designing an effective tool for themselves. I think you said you’ve got a mix of tools that are custom-built which might have two-way interaction, where data’s being put back in through forms or whatever in the tool. Then you have Tableau and some kind of rear-view mirror type historical reporting interfaces which, as I understand it, those start with the user a blank slate? Is that correct? Then they put together the views that they want and the reporting that they want? Kind of curious just for you to talk about how many people are using custom tools that you built versus the ones that they designed for themselves. Are people doing a good job creating the tools they need for themselves? Do you have a sense of that feedback that they’re looking at the right data, that they know how to interpret it, they know how to visualize it? Can you talk a little bit about that? Paul: Sure. Our organization has hundreds of people in it and I would say at least probably 50%–75% of those users are highly technical, which is very helpful, actually. They often come to us with a better idea of what they need. In some cases, we can give them good interfaces to go build their own tools. The historic approach to that here has been to give them pretty decent access to the data in our databases and even the engines themselves. Many of them are comfortable writing their own queries. But we also have a very mature ecosystem of query exchange. We have this tool that allows people to write their own queries and share them with others, and then others can manipulate those queries further and customize them to their own needs. They’re very familiar with that. The piece we’re bringing in next is this idea of really making visualization also of a self-serve kind of area where, with a tool like Tableau, you can point Tableau at the same data that might be the out part of these queries but then have powerful visualizations on top of that. The other piece of this is how much of it do we do and how much of it do customers create from old cloth. It’s kind of a balance. Some people come to us and say, “Here’s what I need but I don’t know how to do it,” and then they ask us to do it. Sometimes a customer actually originate it and will say, “Here’s the report or this query that I think is interesting,” and we’ll say, “Oh yeah, that’s interesting. Why don’t we bake that into something more sophisticated?” It’s kind of a mixed bag but I would say most people come in to us, there’s usually something that we already have that they can use as a basis and then they can usually modify that further. That’s been a pretty successful model for us because it really lets people get what they want, get the very detailed, precise view that meets their needs, but benefit from all of the other work that we’ve put into to making those views and those approaches effective and mature over many years. Brian: It sounds like you don’t struggle as much with engagement with the analytics. You actually have plenty of that? Or would you say that’s not necessarily entirely true? Paul: Yes. I would say we have a lot of engagement with that here. People jump to answering questions with data and they’re quick. They know how to do that and they have very good ideas about how to make sure that the approaches they take are backed by data and backed by evidence. Very mature in that sense people. Brian: Since you have this mix of these custom tools that you guys are building and how slick, how do you decide which wheel is going to get the most oil? You’ve got these custom tools, you’ve got some Tableau stuff, you’ve got people coming in, maybe they are using Tableau, but they don’t know how to build the reporting they need. Is it based on a business driver? If we get problem X wrong, this cost a lot of money, so we’re going to put our team on this problem and sorry, Jane, you’re going to have to take that Tableau tutorial and figure it out yourself. How do you resource like that? Paul: As with any place, there’s certainly scarcity. Everybody wishes they had choice in people they had and twice them. Maybe even the computing resources and everything else that they wished they had. At a high level, a lot of it is driven by a strategic plan, by an idea for what we as an organization are trying to accomplish. That determines which things get the most people and the most priority. There’s actually a very mature culture here at Akamai of helping each other. Not necessarily taking on an enormous project if you don’t have the time for it, but opening your door and helping somebody solve a problem if you have expertise that can help them. We find that it’s a balance of those things. We work on major roadmaps, large projects or tools for strategic and efficiency. Particularly efficiency reasons that we’re wishing to achieve as an organization. We spend a lot of us of the time helping the folks who need it, to get where they need to get. Brian: That makes sense to me. Is the feedback loop in place such that there’s some point in the future which you look backwards on these projects, or products, or tools that you’ve built and say, “Did we make a dent? What were the success criteria for those? What’s that three month or six month rear-view look like?” Do you guys talk about what that is, so you know whether or not you hit your objectives? “And since project X got four times the resourcing, did we get four times the value or whatever the value was that was determined?” I’m always curious about these feedback cycles because there’s a lot of places that they start with this telemetry and data, then they put technology on top of it, they build a bunch of software, and a lot of times the releases and the platforms are looked at as the outputs and the final part of this and it’s actually not. It’s the outcomes that come from the stuff we built that matter. If you don’t know what outcomes those look like, then you don’t know if you actually created anything meaningful. So, I’m curious, that feedback cycle, does your business know? Like, “We have to see. We can’t get predictions wrong or we don’t want to have a little more than 12% server waste from the wrong prediction, whatever.” I don’t know what those metrics are. Can you talk about that feedback loop from a business and a value perspective? Paul: Sure. Some of the things we’re doing are very tied to specific business goals for certain kinds of […]. These are targets for dollars saved in terms of operating the network at a lower cost. In those areas, we are very acutely being measured pretty much on a yearly basis along those lines. We’re working towards getting better at what happens in between and the rest of the year. You can often go off-track a little bit somewhere in one month and that can cost you down the road. We’ve been focused on trying to get to more of a monthly evaluation where we can break things down, try to deliver a value on a monthly basis, then get feedback from customers, and also to see how they’re affecting the numbers in real world application of this data to actually optimize. They never to learn. Are we consistently on track? Or are we moving in the right direction? I say that it’s definitely an element of what we do. Right now, we’re doing it more like every six months or a year. At a granular level, we’d like to move that to be a much shorter term and focus on constantly delivering smaller chunks of value. Brian: That’s good to hear. My understanding from when we talked to that you be almost what I would call a product manager, even though you’re not developing commercial products but you’re overseeing the creation of these different tools. I’m curious. Do you have the equivalent of a product manager role where one person’s job is to make sure that whatever analytics and/or custom tools you guys build for the network operations team or the team that deploys the servers, they live and breathe that world and they’re totally responsible to service those staff that work on those technical problems? Is that how it’s shaped or is everyone’s touching all of the different parts of Akamai? I’m just wondering how you get into that world. What’s it like to be the server administrator and predicting where to deploy servers? How is that structured? Maybe you don’t have enough staff to break it down that way and I’m asking a leading question, but I’m curious if you could talk about that a little bit. Paul: We actually do have four teams within our group and they are divided up with focus on the different stakeholder groups within the network’s organization. There is definitely some division. There’s also some who sort of cross responsibility but there are definitely folks who know specific subject matter areas very well and who are critical in those areas to anything more than the simple bug fix in an area is going to involve somebody managing that area. Now, for our largest projects of all, we do have product managers as well as project managers involved in the creation of the larger ones. I’d say about two or three are major systems and the other several hundred tools or various pieces that we manage, care and feeding over the years. That stuff is either being taken cared of by one of these SME areas or it’s sort of rolling out to me especially if it’s something new. A large part of my role is helping to at the outset to say, “Let’s define what this tool looks like. What it’s doing? Who is going to use it? What those people need? What are the processes at play here at Akamai that this is a part of? Do we understand those processes? Have we optimized those processes?” That’s a lot of what I end up doing with the rest of my team, to define those new products so that they’ll be the most successful as we build them and get off in the right direction. Brian: That sounds awfully like design to me. Paul: It is. Brian: Is that traditionally how things have been done in this group or is this something that’s new? How’s that being received? Are you getting like, “Just give us the data and we’ll put it together,” and you’re like, “No. Help me understand what are you going to do with it at the end.” It’s just like, “Well, I’ll know when I see it.” Is it that kind of thing or are they like, “Great, let’s get it right.” What’s that process like? Paul: The history of our group is that we have probably not put enough focus on planning and design, but I think it’s an area where people realize that we need to spend more. They really are now focused on that as a goal and understanding that it’s important in many context. That’s not to say that there aren’t sometimes when people will say, “Here’s what I need and I need it tomorrow,” and you know that comes up. It’s a balancing act that is always a challenge, but I think there is an increasing sense and increasing support across the network’s organization and maybe beyond that using some sort of platform organization, other parts of engineering at Akamai. It’s really a much better result if you make a plan upfront, you understand the context into which you’re creating this new thing, and you understand how it’s going to impact processes and flow that occur once you’ve built it. Brian: Maybe you haven’t been there because I know you’re somewhat new in this position but if you’ve been there long enough to go through a full cycle with that where you’ve taken someone through like, “Let’s hold on. Let’s figure out what’s actually needed. What the real problem’s face is like,” and then you’ve gone all the way through maybe building a product or a prototype or something. Have you gone through a full cycle yet? Or are you still in the design phase on some of these? Paul: For a couple of smaller projects, we’ve definitely done that. It’s been posted where people have come and said, “Hey, could you do X?” and we’ve said, “Well, we could do X but that actually requires more code and more effort. We have this other thing over here that actually can accomplish that and then it puts you more in the driver’s seat because you can help maintain it later. How’s that?” Often, the results are very positive. If we can actually get things implemented faster, people are happier in the end, it’s less maintenance for us overall in the long-haul. So, yes on the small things. On the bigger things, those are in progress and we’re excited about those design phases that’s going on now. They’re larger and more productive than they’ve been in the past. We’re excited to see probably by the middle of this year or later in the year that there is also an output of that. Brian: Can you tell us about what some of those activities are? I think some of the people listening to this are not coming from digital-native companies. The whole product design process is maybe foreign to them. Can you tell us about like, “What are you doing during this time? Why aren’t you writing code? You have the data. Put Tableau there and build some reports.” What are you doing that’s not that during this phase? Paul: Usually, the first thing we’re doing is trying to find out who are all the people that interact with this data, or these kinds of systems, or these particular business objects, or aspects of Akamai’s network. Often at the start, we find there’s common problems. There’s people and other parts of the organizations who may already have a tool that allows them to do this. Now we also want to go and observe those users. We want to go find out are they satisfied with the tool and is the tool meeting their needs, which are actually two different questions. Really seeing whether what they’re doing is a process that’s optimal and seeing whether we can create a solution to this new problem or borrow a solution to this new problem and change it in some way that helps everybody. That’s one of the interesting aspects of design here is that there are many groups that interact with the same data in so many different ways. I think a lot of that design phase is about, “Hey, one of the tools out there, how do we integrate them so that they’re the least work for us? How do we make sure that we’re choosing a good solution and we’re actually meeting the user’s needs?” Probably the last part of that, especially in our group is, and not getting stuck on not meeting 100% of any single tool, because in some cases, you’ll get 80% of the use cases for five groups and you have to say, “Okay, that’s fine. For this other case, they’ll do it this way.” That’s a lot what goes into the design process. Really just understanding what the users are looking for, how does that match up with stuff we already have, and then how do we integrate that use case into what we maintain, in a way that is streamlined and effective for them and also streamlined and effective for us. Brian: When you talk about getting to know what they’re going to do with this information and how they want to use it, is that through them self-reporting through, like talking to you in a meeting? Is it through you observing them doing what they’re doing now without the tool? Is this largely like, “Right now I can’t do any of this. I need this tool so I can enable this new thing that I currently don’t do,” or is it more like, “I have this long, convoluted process I have to do in order to achieve X. Can you help me build the tools so I can do it in less time?” One of those there is like a recipe for something already and you’re trying to optimize it and the other one is more like, “This is a new thing I’ve never been able to do but maybe I could with your help.” Do you put it into those buckets and then if it’s the former, how do you figure it out? Is it observation or just them talking to you about how they’re going to use it? How do you figure that out? Paul: There definitely are both of those scenarios come up. We often get requests about processes that already exist. At some point, there’s some tool in there already, sometimes it’s a highly manual process. In that scenario, one of the great assets of this particular group is that we have whole standards, documentation, and work co-optimization group here within network, which is a true treader to have. Usually, when that kind of problem comes up, the first thing we do is say, “Okay, let’s work with the [worker?]group and let’s get a really good map of what this process looks like end-to-end and let’s look at what the steps are, what tools are now, where the pain points are, and then once we have drawn this out so that we understand the context, let’s actually first look and see whether there’s any way we can optimize the process, because the last thing we want to do is to spend a lot of time implementing automation steps for a process that shouldn’t be that way in the first place.” We look at that process and we say, “Okay, how do we simplify it? How can we bring automation to bear, to make the process more straightforward, take less time, take less human effort.” Then, we usually at that point, sit down and actually design the automation solution around that. That’s one kind of problem and that process of workflow [analysis…] does involve what we call business process performers in each step. These are not the people who manage those areas. These are the people who are actually doing the work. We want to know what are they actually doing, we talk to them whenever we can, and we actually go [observe.] them because we can learn at least this much and probably more by watching what they’re doing and what they’re struggling with. That’s one side of it. The less well-described problems, those are the ones where nobody knows yet. This is something brand new. There, I think we tend to sit down and try to understand what these users are trying to accomplish, what problems they had in the past that this addresses, because so often, something that’s new is really some way connected to something old. We did this before. It didn’t really work or we have a gap here, there’s something that we’re not doing as well as we should or we’re not doing at all, and how do we get that better? A lot of it is about understanding what they’re looking for and I think the big element of that that’s key is breaking it down into manageable phases so we can deliver quickly and iterate quickly. The last thing you want to do is sit down and say, “Okay, we think we understand exactly what you need. Now, we’re going to go off for a year-and-a-half and build it.” That’s always a recipe for disaster. So, what we want to do is sit down and say, “Let’s take the most important crux of what you’re trying to get at here. Let’s implement something in a few weeks or a month. Then, let’s sit down and get it in your hands, get your feet back on it, and then figure out the next piece.” This doesn’t mean we can’t have a plan for like, “Here’s really roughly what we think the phases are going to be and how they’re going to be laid out. But let’s have these checkpoints along the way and let’s iterate based on what we actually are able to learn, what we actually to benefit from.” That’s what we found is the key to those kinds of new projects is the fast iteration cycle. Brian: We’ve talked a little bit about the MVP approach, which is about doing that minimal amount of work, which may or may not be working code, but you did a minimum amount of stuff to figure out whether or not it’s meeting a need that your customer has. You’re going through some type of observation process to fuel the first thing, the first asset or output that you create. It’s fueled by some kind of observation or research upfront so that when you go up to bat and take the swing, there’s a better chance of at least to base hit and not a strikeout or something. I fully support that type of effort instead of me going off, “We all have the data. We’ll send you back a kit and then you can put it together yourself. It will take a year, you’re going to dump everything into the data warehouse, and then you fall into the Gartner 85% of ‘Big Data Projects That Failed’ category, which nobody wants to be in that whole thing. I think that that’s really great you’re doing some of that. Earlier, you said you have a lot of different products and you said two to three of them are large. I’m just curious. Large by number of users? What justifies putting a dedicated product manager on it and what’s the extra love that is received because you’re one of those two or three? Is it they have a dedicated designer and dedicated engineers? It is more research time? Tell us about your big ones. Paul: I would say that the largest projects usually have someone who’s effectively an architect for the project, who may also be part of the development team. They usually have a development team. It’s usually several people. At least in an ideal world, three or four is probably typical for larger projects. Then there’s a project manager who is managing the project and also how that reports up into our overall program of initiatives for that organization. Usually, those projects, to get substantial research, are going to be priorities for the organization at some higher level. The last [piece] probably the most important piece is that there’s a product owner, who may or may not be the architect, in some cases the architect plus feedback from the stakeholders is enough to make it work, but most of the time, it’s usually somebody who is also the project owner or the product manager who’s really responsible for shaping the design of that product. For example, one of the big tools we’re working on has to do with increased virtualization that we’re rolling out within the Akamai network. This is a big project because it’s a company-wide initiative. We have somebody working on designing the interface and working to figure out how the interface to provisioning works within the context of all the processes we have here at Akamai. Another example, one of our key analysis or databases for analytics and for planning. There, the ownership is essentially a data team who is responsible for this database, the universe of this data, and roughly how it’s visualized. That team has responsibility for that database for its schema, how we got that data, where it comes from, its cleanliness, but also for the visualization aspect of it, and then it’s now also inheriting this ‘how do we use Tableau as part of that ecosystem?’ Just to give you some idea how these projects are organized and then what the roles are. Brian: Got it. Your large projects fall both into maybe a database that’s sitting behind Tableau as the interface and then you have another one, the server provisioning one, which sounds like a custom web-based application or something? Paul: That’s right. Brian: So then, for that one, to me that’s the decision support. The provisioning action would be the decision the human takes theoretically, upon some analytics or insight, that made them decide, “I need to push the button to deploy X servers in Y region or whatever it may be.” Is that decision support part of that custom product as well? Or is this a balance between two or three different Tableau instances that are behind different databases, and then you co-authored the provisioning tool and just do the action, you make the decision in that tool, but the insight about when and how and where to make the decision is not part of the tool? Or is that actually in that tool as well, where it’s like, “Hey we predict that you should do this,” or “Here are the stats. You come and make the decision on provisioning based on what’s in this tool.” How much is that wrapped together versus a series of different URLs you’re going to bounce through and piece together yourself with eyeball analysis? Paul: There’s some separation of systems and we’re actually moving into a more integrated direction. For example, a lot of us begin with a customer demand. Either we determine or the customer gives this information that helps us determine that they need capacity in a certain area. That drives the process but that also factors in to a lot of decision-making that goes on, right about exactly what gets deployed, where, and when. There’s elements of this that are integrated in a sense that the deployments that we’re planning to make to expand a network or to choose a network in some way, are inputs into this great big optimization model where you say, “Here’s what we know we think is coming, here’s what we know we think is going to happen, here’s the moves we’re planning to make when and where we will run out of capacity. I think we’re moving towards a more integrated feedback model for that where less of the work has to be sort of connect the dots by a human being and more to saying, “Okay, all the systems have this data and if they can exchange it with each other, then we have all the data in the places we need it.” Brian: You’re talking about this feedback cycle annually, then you might look back and say, “How well did we arrange for these optimizations? We planned for these predictive resource allocation or whatever it may be,” you look back and see how accurate that was by looking at the utilization rates or something? Paul: Exactly. Is there a customer demand we failed to meet? On the flip side, were there servers sitting around underutilized? Brian: Got it. When we talk about Akamai going out and deploying servers, are you talking about deploying physical hardware in a datacenter or are you just talking about provisioning up virtual servers on the cloud somewhere? I’m just curious because you guys are a network that sits on top of the internet. Does this involve lots of humans and you’re rolling out hardware and all that or are we really talking about virtual deployments? Paul: Some of each, but one of Akamai’s hallmarks, actually, is the breadth of the network. We have some servers in pretty remote locations. These are physical servers. These are places in some cases where there isn’t a lot of good cloud providers or anything like that. Brian: Johnny’s going to the Arctic to install some Dell servers. Paul: That’s right. I’ll tell you there’s a datacenter in Antarctica and it’s possible we have a server there. Brian: Someone’s got to go rewire it once in a while. Oh, we’re out of a storage. There’s still disk drives in that cloud up there. They might be flash, but they’re still a piece of hardware. Paul: One of the things that really differentiates Akamai is that we have this extensive edge network which really is pretty unparalleled to the industry. Brian: When there’s a report back then, do they look at the travel cost for Johnny going to the Arctic on an ice clipper or whatever it’s called, and then was it worth going there to deploy these servers? Paul: Sure. Increasingly, that is the kind of analysis that we’re doing. [and] we manage the network according to some of that. When there’s servers that are sitting somewhere and just not getting used or they’re there but they were extremely expensive to put there, then maybe that’s not a place to cover in the future. But in some cases, it makes sense to keep our coverage really good even if in one area where we’re sacrificing a little bit of cost to keep the coverage up over all and that might be worth it. Brian: Right. I’m curious. Now that you’ve been here awhile and through all these, do you have any stories or anecdotes about a particular user experience, a customer/internal user that found an approach that’s useful, or you’ve got some feedback or maybe it was negative, but you learned something not to do it again, or any type of anecdotes that you can think about that were insightful for you? Paul: Yes. We had a number of tools that we use for manipulating all the business data around what’s deployed in our network. I would say that I guess the best [anchor??] I had about them is that we’ve found there are tools that are very commonly used because of their flexibility. But if you actually look at the tool itself and you look at the complexity of the tool, it’s not that complex. It’s the default way of using things and people have used it continually because it has always been the way of using it, when in fact, there’s nothing particularly special about it. We’ve seen in certain circumstances where you give somebody a new tool that just works faster, it provides very similar interface, or you found some tweak to that workflow that really can save them tons and tons of time, and you just watch their eye pop out. They realized that you just probably saved them two hours a day. It’s interesting that that can happen in pockets and corners. There are many tools that have been built already to help with that but there are still plenty of opportunity for it. Brian: That’s great. That’s one of the things I think I love about being a designer. A lot of times, the big picture rewards like, “Was this product valuable or profitable?” There’s these lagging indicators which take a while and they don’t have the same hit as those small wins which were like, “I just saved this guy two hours a day doing a task that has nothing to do with his skill set. It’s just labor. He’s not using his brain. He just has to download these logs, put them in Excel, run a lookup, and then blah-blah-blah. And now it’s just bam.” I love that and that’s part of it for me, at least the joy of doing design work and stuff. I totally relate to the way you’re saying about helping someone. It is so much about helping people and you also feel like, “Man, I’m also helping the company because I’m helping this person use his brain to do much more important things than maybe he was doing with tool time, like downloading crap and uploading into a tool, sorting it, changing this, and blah-blah-blah.” Most of that is tool time. That’s not the, “Should we put more servers in Antarctica?” It’s not the thinking time and the valuable business time. Paul: It’s one of the very fulfilling aspects of the job like this where you’re building tools for internal stakeholders. In many software industries, you build product but your users might not be accessible for you or hardly at all. “I see that they’re right down the hall.” It’s a great fulfillment I think in building something that meets a person’s need and having that feedback and knowing that [did.] and having the satisfaction of that. Brian: Yeah, that’s awesome. This has been great. I’m curious. Do you have any closing advice for other product owners or data product leaders, analytics practitioners in your space, maybe about changing domain, you’re in a new domain? Any kind of insights looking back in this six months or however long that’s been that you’ve been there? Paul: I would say above all, my advice would be take the time to plan. Nobody ever thinks they have the time to design or to plan. To some extent, you just have to say, “If we don’t do this, [you know] the thing we build is not going to be worth nearly a much as the thing we could build.” You’re much better off figuring out the right design for something before you build it. Even when you think you don’t have the time, ask your managers and then your management chain for that space you need to get that pipeline started the right way because once you actually design things, you’re going to find that the number of people you’re helping and the degree at which you’re helping them is much greater. Brian: I can totally get behind that. That closing statement, I agree. First of all, you’re putting that anchor in place to do good things down the road. You’re probably reducing you’re technical debt and you’re maximizing your ability to change, especially when you’re doing small deployments. You’re probably going to need to change stuff, so a little bit of designing and planning upfront can do a lot for both the engineering part of it but also most importantly the customer experience getting that right. So, amen to that. Paul: Maybe the last part of that, just to add, is sometimes we take for granted the job we’ve been at for a long time. We actually take for granted that we think we know what everybody needs already. Sometimes, actually, it’s a blessing when you come to something brand new, because you’re not to assume you already know what that person across the hall really needs. You say, “I’m going to ask that person because I have no idea.” I would say these problems are the same everywhere. Whether you’re in a place, in a domain you’ve been for a while, there’s still going to be some aspect to that problem and you don’t understand what that person is living with. Pretend being the new guy for as long as you can. Go ask again and get to really understand what that person is experiencing because I know you’re going to able to meet the need much better. Brian: Yeah, I think that’s great advice. You don’t have that bias from your own knowledge about the domain or your assumptions there and that’s just a good design technique in general is being able to compartmentalize. We all come to the table with bias but if you can try to put that aside. For me, a lot of times it’s like leaving with new stuff with clients. It’s explain it to me like a five year old and I tell my clients sometimes this like, “What does it mean to deploy a server? What is he literally going to do and how does he know when to push the button to go do that,” and sometimes they look at you like, “What do you mean? You don’t know what a server is?” It’s like, “Well, I know what a server is, but literally I want to see every step it takes to know to go put one there. Is the guy going to walk out there with a box and rack it up? Or is this a virtual thing? Literally tell me what that’s like, that whole process.” Even though I know something about how that works, you’re going with that clean slate because you want to be open to those things you don’t know to ask about, and that the more you can come in with removing as much of that bias is possible, you might find those nuggets and stuff that just pop out to you that the customer doesn’t know to tell you about, but that they’re just going through their process. They’ll often ping you. You have these moments where you’ll learned something you didn’t go in there to ask about and sometimes it can be a really big thing like, “Wow. That’s really what the gap here is. It’s not this. It’s this another thing.” Having that really childlike innocence about the way you inquire can help enable that. Paul: Absolutely. Brian: Where can people find out about you? LinkedIn? Twitter? Are you out there in the internet? Paul: I’m on LinkedIn, for sure. I’m on Twitter. I’m on Facebook. Brian: Where are you on LinkedIn? What’s your Twitter handle? I’ll put the links in the notes, too. Paul: I think I’m @pjmattal everywhere. Brian: @pjmattal on Twitter. Okay, great. I’ll put your information up there. Thanks for coming on the show. It’s been great to hear about what you’re doing in Akamai and good luck as you guys charge forward. Paul: All right. Thanks.

Nancy Hensley is the Chief Digital Officer for IBM Analytics, a multi-billion dollar IBM software business focused on helping customers transform their companies with data science and analytics. Nancy has over 20 years of experience working in the data business in many facets from development, product management, sales, and marketing. Today’s episode is probably going to appeal to those of you in product management or working on SAAS/cloud analytics tools. It is a bit different than our previous episodes in that we focused a lot on what “big blue” is doing to simplify its analytics suite as well as facilitating access to those tools. IBM has many different analytics-related products and they rely on good design to make sure that there is a consistent feel and experience across the suite, whether it’s Watson, statistics, or modeling tools. She also talked about how central user experience is to making IBM’s tools more cloud-like (try/buy online) vs. forcing customers to go through a traditional enterprise salesperson. If you’ve got a “dated” analytics product or service that is hard to use or feels very “enterprisey” (in that not-so-good way), then I think you’ll enjoy the “modernization” theme of this episode. We covered: How Nancy is taking a 50-year old product such as SPSS and making it relevant and accessible for an audience that is 60% under 25 years of age The two components Nancy’s team looks at when designing an analytics product What “Metrics Monday” is all about at IBM Analytics How IBM follows-up with customers, communicates with legacy users, and how the digital market has changed consumption models Nancy’s thoughts on growth hacking and the role of simplification Why you should always consider product-market fit first and Nancy’s ideas on MVPs The role design plays in successful onboarding customers into IBM Analytics’ tools and what Brian refers to as the “honeymoon” experience Resources and Links: Nancy Hensley on Twitter Nancy Hensley on LinkedIn Quotes: “It’s really never about whether it’s a great product. It’s about whether the client thinks it’s great when they start using it.” –Nancy “Every time we add to the tool, we’re effectively reducing the simplicity of everything else around it.”–Brian “The design part of it for us is so eye-opening, because again, we’ve built a lot of best in class enterprise products for years and as we shift into this digital go-to-market, it is all about the experience…”–Nancy “Filling in that “why” piece is really important if you’re going to start changing design because you may not really understand the reasons someone’s abandoning.”–Brian “Because a lot of our products weren’t born in the cloud originally, they weren’t born to be digitally originally, doesn’t mean they can’t be digitally consumed. We just have to really focus on the experience and one of those things is onboarding.” –Nancy “If they [users] can’t figure out how to jump in and use the product, we’re not nailing it. It doesn’t matter how great the product is, if they can’t figure out how to effectively interact with it. –Nancy Episode Transcript Brian: Today on Experiencing Data, I [talked] to Nancy Hensley, the Chief Digital Officer of IBM Analytics. Nancy brings a lot of experience and has a lot to say about how user experience and design have become very integral to IBM’s success especially as they move their applications into the cloud space. They really try to bring the price point down and make their services and applications much more low touch in order to access a new base of subscribers and users. I really enjoyed this talk with her about what the designers and people focused on the product experience have been doing at IBM to keep their company relevant and keep them pushing forward in terms of delivering really good experiences to their customers. I hope you enjoy this episode with Nancy Hensley. Hello everybody. I’m super stoked to have Nancy Hensley, the Chief Digital Officer of IBM Analytics. How’s it going, Nancy? Nancy: Good. I’m happy to be here. Happy Friday. Brian: Yeah. It’s getting cold here in Cambridge, Mass ; [ you’re] in Chicago area, if I remember correctly. Nancy: Yeah, it’s a little bit chilly here as well. Brian: Nice. So it begins. You’ve done quite a bit of stuff at IBM when we had our little pre-planning call. You talked a lot about growth that’s been happening over at IBM. I wanted to talk to you specifically about the role that design and experience has played, how you guys have changed some of your products, and how you’re talking to new customers and that type of thing. Can you tell people, first of all, just a little bit about your background, what you’re currently doing, and then we could maybe […] some of those things. Nancy: Sure, happy to. Thank you for having me again. I think I’m one of those people that doesn’t fit nicely into a box of, “Are you product? Are you marketing?” I am a little bit of both. Most of my IBM career, I have moved in between product marketing and product management. That’s why I love digital so much because it really is a nice mixture. And in particular, growth hacking because it combines all the things I love, including data as a part of what we do. What I’m doing right now as a Chief Digital Officer in the Analytics Division and Hypercloud is how do we transform our products to make them more consumable, more accessible? We have best in class products in data science, in unified governments and integration, in hyper data management products, but our products and our business is built on a traditional face-to-face model. There is even a perception that we’re not as accessible to them and that’s what we’re looking to change. Creating those lower entry points, making it easier for people who didn’t have access to us before, to start small and grow through a digital channel, through a lower entry point product, and then scale up from there. That’s really what we’re trying to do and as part of a bigger mission to really democratize data science—I kind of cringe when I say that word—I think it’s really important for more clients to be able to be more data-driven, have tools that are easy to use, and leverage data science to optimize their business. Part of the way we’re doing that is to develop a digital route to market. We’re pretty excited about it. Brian: I think a lot of our listeners probably come from internal roles of companies. They might be someone that’s purchasing vendor software as opposed to a SaaS company where they may have a closer role to marketing and all that. Can you tell me what you guys are doing there? Part of the thing with my experience is that some of the legacy companies, the older companies that are out there tend to get associated with big giant enterprise installations, really crappy user experience. It’s just so powerful, you have to put up with all these stuff. People’s tendency these days to accept that poor experience as just status quo is changing. What have you guys done? Not that you’re to blame but I’m sure that opinion exist. How do you guys adapt to that and wonder if upstart analytics companies coming out with other things, what do you guys to to address the experience? Nancy: There’s certainly a perception that IBM is that big, complicated, enterprise-focused product out there. We see the data. There’s a lot of articles, there’s a lot of feedback, there’s endless report that all validate that clients are trading off complexity or features and functions for consumability, because they got to get things done, they have less people to do it. We fully recognize that. Where we started to look for that was how we first started to make things much more accessible, not just our cloud products because that’s pretty easy if you have stuff in the cloud—it’s pretty accessible—but our on-prime products as well. So, for clients that are running analysis behind the private cloud, whether it’s a statistical product, or a predictive analytics product, or data science project, or even what they’re doing on their data catalog, all of that was not something people would go to the cog to look for it. There are some things they need especially financial and health care, and there’s large and small companies on both sides. One of the things we set out to do is how do we create that cloud-like experience for clients that are running things behind their firewall. We started a project about a year ago to look at some of our on-prime products and create that experience where literally you could, within a couple of clicks, download, try, and be using a product within 15 minutes. That was our goal. As opposed to before where you would have to contact and IBM salesperson, get them to come out and meet with you, and then set-up a trial. That’s what we started to change was that at least make it accessible. As we progressed that capability, we started changing our pricing and packaging to be appropriate, to create that entry-level point, to create a shift to subscription. You want to buy everything on subscription these days, I think. The last part of that shift for us has been to really focus on the experience because a lot of these products were not born digital. We really need to make sure that when clients were coming through that channel, that it was a great experience. That’s really where design experience came into play for us. Brian: How did you know of what’s wrong beyond broad surveys or just that general feeling that like, “Oh, it’s the big giant bloated software…” the stereotype, right? How do you guys get into the meat and potatoes of like you said, sounds like there’s a benchmark there, 15 minutes on that first onboarding experience, but can you tell us a little bit of maybe if you have a specific example about how you figured it out? What do we need to change about this software application to make it easier to get value out of the analytics of the data that’s there? Nancy: I’ve got lots of examples. We’ll opt with one that clients actually are very familiar with, which is SPSS Statistics that a lot of us used back in college. That was a product that actually turns 50 years old this year. It’s been out a while, a lot of people still using it a lot, and most of our base of users for statistics, I think if you look at the demographics of it, over 60% are under the age of 25. So, their buying preferences were very different than they were when they started out in 1968. We look at the verbatims from our NPS feedback and it was clear that clients really wanted a much more simplified and flexible experience than buying SPSS Statistics and having access to it. A lot of times, students have to get it really quickly for a project because they’ve might have waited until the last minute and they wanted a much more flexible subscription-based program. They might only use it for a few months and then come back to it. That was one of the first things that we implemented was to change the buying experience for the consumption model. We didn’t actually change the product at that point. We just changed the consumption model to see if in fact that actually will help us have some growth on that product, and it absolutely did. Since then, we’ve actually gone back and change the product as well. It’s got a whole new UI for its 50th anniversary. Joke around that it’s got a face lift for it’s 50th anniversary. Brian: Does it have a green screen mode? Nancy: It is a completely different experience, not just from a buying perspective, but also from a UI perspective as well. We have other products, too, that have been around maybe not 50 years but have been very popular products like our DB2 Warehouse on Cloud and our DB2 database that clients have been buying for years to run their enterprises. We wanted to make that again, as we created a SaaS alternative of these products that it was extremely consumable. So, we’ve been looking specifically, is it easy to figure out which version to buy? How much to buy? What it’s going to do for you? Like I said, which version? How do I calculate things? We’ve been really looking at the experience of that is, if there was no salesperson at all, how do we help clients through that buying experience? Brian: I’m curious. When you decided to helping them through the buying experience, does any of that thinking or that strategy around hand-holding someone through that experience happen in the product itself? I’m guessing you’re downloading a package at some point, you’re running an installer, and at that point, did you continue that hand-holding process to get them out of the weeds of the installation and onboarding again to the actual, “Is this tool right for what I needed to do?” Everything else being friction up until that point where you’re actually working with your data, did you guys carry that through? Can you talk about that? Nancy: You’re hitting one of my favorite topics which is onboarding. Because a lot of our products weren’t born in the cloud originally, they weren’t born to be digital originally, doesn’t mean they can’t be digitally consumed. We just have to really focus on the experience and one of those things in onboarding. Let’s say, DB2 in particular, which won the process of creating onboarding experience for DB Warehouse on Cloud. For anybody who’s used DB2, we do have an updated UI for that. They can jump in and start using it. But that’s not everyone, the people that haven’t used it before. So, we just started working with a couple of different onboarding tools to create these experiences. Our goal was to be able—at least I’m offering management side alongside our partners but design—to create these experiences in a very agile way and make them measurable—my second favorite topic, which is instrumentation—but not have a burden on development, because the fact is, in almost any organization, development wants to build features and functions. Whenever we talk about this, they were prioritized lower because they want to build new capabilities. They’re less enthusiastic about building in things like onboarding experiences. With some of the tools like [.DB2..] give us, is a way to make it codeless to us. We can create these experiences, then pass the code snippet, and then measure whether those are effective or not because we actually see those flowing through segment into our amplitude as a part of the shuttle. We’ve got some great feedback as to whether they’re working or where they’re falling down. We can create checklists of things that we want the clients to do that we know makes the product sticky, and see if they actually complete that checklist. It’s giving us so much better view because before, what we would see with a client is register for trial, they downloaded the trial, they’ve created their instance, and then boom they fall off the cliff. What happened? Now we’re getting a much better view to what’s actually going on for the products that have been instrumented as well as the view we’re getting in from the onboarding experiences. Brian: For every one of these applications that you’re trying to move into a cloud model or simplify whether it’s cloud, to me the deployment model doesn’t matter. It’s really about removing the friction points whether it’s on-premise software or not. I think we all tend to use the word ‘cloud’ to kind of feel like, “Oh, is this browser-based thing? There’s no hard clients? There’s no running scripts at the terminal and all that kind of stuff?” Do you guys have a set of benchmarks or something that you establish for every one of these products that are going to go through a redesign? Nancy: We do. We’ve got a set of criteria, it’s really broken down into two pieces. Whether it’s going to be a cloud product or an on-premise product—I actually have a mix of both—there is what we call the MVP side, which might be something that’s not born in the cloud, it’s not a new product, and we’re looking to create a lower entry point, a really good trial experience, a very optimized journey. We’re even doing things like taking some of the capabilities that we used to have from a technical perspective and making those more digitally available. Online proof of concepts, hands-on labs that you do online instead of waiting for a technical salesperson to come out to see you. Tap us that can answer your questions faster even before you talk to a sales rep. All of that is included in the what we call the MVP portion of the criteria that we look at. Pricing and packaging’s got to be right for the product, for the marketplace. Got to have that right product market fit that you’ve got a good valuable product but a low-enough entry point where somebody can start small and scale up. The second part of the criteria is where the growth magic happens, where we’re dumbing down a lot more on the experimentation, where we’re making sure that we’ve got onboarding, instrumentation we want done, and the MVP phase, we don’t always get it, but our development partners really understand the value of that now, which is great. Though more often, we’re getting into the second phase of where we’re more doing the transformation. Through that, then we’re getting a lot more feedback, where we can create the onboarding experience. We can do even more on the optimized journey. We’re doing a lot of growth hacking that’s based on terms of optimizing. Things like how clear is information on the pricing page? Is it easy for the customer to figure out what they need to buy? What the pricing is for that? Can they get their questions answered quickly? Can we create a deeper technical experience for them, even outside of the trial itself? Like I mentioned, things we’re doing with our digital technical engagement, thinking that what used to be our tech sales modeling and making it more digital. Brian: That’s cool. When you guys go through this process of testing, are you primarily looking at quantitative metrics then that are coming back from the software that you guys are building, or you’re doing any type of qualitative research to go validate like, “Hey, is the onboarding working well?” Obviously, the quantitative can tell you what. It doesn’t tell you why someone might have abandoned at this point. You guys do any research there? Nancy: We do. It happens in a couple of places. We run squads that are cross-functional across marketing, product, development, and design, each product. Then every Monday we have this thing called Metrics Monday where we get the cross-functional routines together, we share the insights around the metrics. If we had a big spike or we had a big decrease, or if we had a change in engagement, or if we did some experimentation that came out with a very interesting result, we actually share that across teams. We really focus on why did things happen. We have a dashboard. Everybody is religious in using on a daily basis that tracks all of our key metrics, whether it’s visits, engage visits, trials, trial-to-win conversions, number of orders, things like that, but we also want to dive deeper into the ebbs and flows of the business itself, why things are happening, and if the experimentation we’re doing is helping or not helping. We’ve got a lot of focus on that on a daily and a weekly basis. Brian: Do you have any way to access the trial users and do one-on-one usability study or a follow-up with them that’s not so much quantitative? Nancy: Our research team and design will do that and they’ll take a very thorough approach to both recording users using the product, getting their feedback. It’s pretty thorough and also gives us some feedback. We usually don’t do that until the product’s been in the market for a little bit longer. We’ve got some hypothesis of how we think it’s doing, and then the research team will spend a couple of weeks diving a lot deeper into it. We get some great feedback from that. Honestly, as a product person, as much as I’d to think I’m focused on a beautiful experience, my lens versus our designers’ lens is completely different and they just see things we don’t. Brian: Yeah, the friction points and filling in the why’s, it takes time to go and do that, but it can tell you things, it helps you qualify the data, and makes sense especially when you’re collecting. I’m sure at the level that you guys are collecting that, you have a lot of inbound analytics coming back on what’s happening. But it’s really filling in that “why” piece that is really important if you’re going to start changing design because you may not really understand the reasons someone’s abandoning. Maybe it’s like, “I couldn’t find the installer. I don’t know where the URL is. I ended up locking the server on my thing and I don’t know how to localhost, but I forgot the port number,” and the whole product is not getting accessed because they don’t know the port number for the server they installed or whatever the heck it is, and it’s like, “Oh, they dropped off. They couldn’t figure it out how to turn it on, like load the browser…” Nancy: Right, and even behavioral things that we don’t always think of, like putting a really cool graphic in the lead space that actually takes the attention away from the callback-ends. We’re all proud of, “Hey look at this cool graphic we built.” One of our designers uses a tool that tracks eye movements and [wait a second] “We’re losing the focus here.” But again, you don’t always see from that lens. The design part of it, for us has been so eye-opening because again, we’ve built a lot of best in class enterprise products for years. As we shift into this digital go-to market, it is all about the experience. It’s all about how good the experience is, how easy the experience is, how frictionless it is, and it’s also about how consumable and accessible the product is in the marketplace. Brian: You mentioned earlier, it sounded like engineering doesn’t want to go back and necessarily add onboarding on all of this. This gets into the company culture of who’s running the ship, so to speak. Is it engineering-driven in your area? How do you guys get aligned around those objectives? I’ve seen this before with larger enterprise clients where engineering is the most dominant force and sprints are often set up around developing a feature and all the plumbing and functionality required to get that feature done, but there’s not necessarily a collective understanding of, “Hey, if someone can’t get from step A to step G, horizontally across time, then all that stuff’s a failure. Step F which you guys went in deep on is great, but no one can get from E to F, so definitely they can’t get to G.” So, that’s you’re qualifier of success. How do you guys balance that? Who’s running the ship? Does your product management oversee the engineering? Can you talk a little bit about that structure? Nancy: We call operating management aside from product management for a reason, because we really do want the operating managers to feel like they’re the CEO of their business and run the ship. Of course, development has a big say at the table, but they have a natural tendency to want to build capabilities. It’s never going to go away. It’s been that way for ages. We just don’t want to fight that tendency. We want them to focus on building, not take six months to build an onboarding experience when they could build in really valuable functionality in that six months instead. So, we really run it as a squad, just like many other companies. Operating management does leave a lot of the strategy with our products and development, but I would say that design is also a really, really chief at the table, for sure, absolutely. Brian: Tell us a little bit about your squads and is this primarily a designer or a UX professional up in your offering manager? Are they a team and then you pull in the engineering representatives as you strategize? Nancy: My team is a digital offering management. We’re a subset of offering management better known as product management. We will run the squads and the squads will be a cross-function of our product marketing team, our performance marketing team, which is demand to and type marketing. They run the campaigns, design, developments, the core product managers because we’re the digital product managers and such, and then there’s the core product managers. They have all routes to market. We’re just focused on the digital ones. With that is the cross-functional squad that gets together on a weekly basis and they run as a team. From a digital perspective, it’s led by the Digital OM for our route to market there. Brian: That’s interesting. How do you ensure that there are some kind of IBMness to all these offerings? Your UX practice and offering managers sound like they are part of one organization, but I imagine some of these tools, you might be crossing boundaries as you go from tool X to tool Y. Maybe you need to send data over like, “Oh, I have this package of stuff and I need to deploy this model,” then we have a different tool for putting the model into production and there’s some cross user experience there. Can you talk about that? Nancy: That’s really why design’s been key because their job is to keep us onus making sure that the experience is somewhat consistent across the tools so they seem familiar to us, especially within a segment data science. Some of these are using our Watson Studio tool and then moves to our statistics for our modeler tool. There should be a very familiar experience across those. That’s why design is really the lead in the experience part of it. From pricing and packaging, we try to maintain a consistency as much as possible across all the products again. Whatever level of familiarity you have and how we price and package things should be consistent across the entire segment. So we strive for that as well. On the digital side, in terms of the experience on the actual web, we partner with a team called the Digital Business Group. They are basically the host of our digital platform and they maintain a level of consistency worldwide across all the products in terms of the digital journey itself with us. Brian: That’s cool that you guys are keeping these checkpoints, so to speak, as stuff goes out the door. You’ve got the front lenses on it looking at it from different quality perspectives, I guess you could say. Earlier, you mentioned democratizing data science and we hear this a lot. Are we talking about democratizing the results of the data science, so at some point there’s maybe decision support tool or there’s some kind of outcome coming from the data science? Is that what you’re talking about democratizing? Or are you saying for a data scientist of all levels of ability, it’s more for the toolers as opposed to the [consumers..]? Nancy: It’s about the capability. The ability to put more of these products or these products in people’s hands that bought, that they might have been out of their reach, or that they were too enterprisey, or that they are for big companies. That’s one of the key things that we want to do. When you look at some of our products, they start really, really low. Cognizant Analytics is another great example where people might have had a perception that it’s really expensive but we just introduced a new version of it, and it’s less than $100 a month. You can get these powerful tools for analysis for a lot less than you think. Statistics in $99 a month, one of our pay products are significantly less, and it allows these companies that might not have considered doing business with us, to smart small and build up. That’s one of the key things we noticed as we shifted to a subscription model. With that, we started to see double digit increases in the number of clients that were new on products. Just because opened up this new route to market, doesn’t mean that we still didn’t maintain our enterprise face-to-face relationships because, of course, we did, but this allowed us to open up relationships with clients might have not gotten to before. Brian: How are the changes affecting the legacy users that you have? I imagine you probably do have some people that are used to, “Don’t change my toolset,” like, “I’ve been using DB2 for 25 years.” How are they reacting to some of the changes? I imagine at some point maybe you have some fat clients that turn to browser-based interfaces. They undergo some redesign at that point. Do you have a friction between the legacy experience and maybe do you employ the slow change mentality? Or do you say, “Nope, we’re going to cut it here. We’re jumping to the new one and we’re not going to let the legacy drag us back”? You talk about how you guys make those changes? Nancy: We’re shifting towards the subscription model. Our clients are, too. We have clients that are demanding that this is the only way that they actually want to buy software is through a subscription model. So it’s changing for them as well. I think in many ways, it’s a welcome change across the board. I can’t think of any negativity that we’ve had in both the change for the consumption models on a subscription side, as well as the new UI changes and things that we’re doing to the product that really update them and give them a modern feel. I know a lot of the onboarding is a welcome change, even for clients that are familiar with us. It helps them because they have to do less training internally to help people use the tool because now we’re building it into the product. Brian: How do you measure that they’re accepting that? Do you wait for that inbound feedback? Do you see if there’s attrition and then go talk to them? I imagine there’s some attrition that happens when you make a large tooling change. Is there a way to validate that or why that happened? Was it a result of changing too quickly? Any comment on that? Nancy: I think it’s a couple of things. We’re constantly monitoring the flow of MRR and the contraction of revenue where the attrition that we get through some of our subscription, to see if there is any anomalies there. But also we’re always were very in-tune with NPS. A lot of our product managers live and die in the verbatims and with the integration of FLAX, they get a lot of it. They’re coming right at them constantly, that they respond to. We are very, very in-tune with NPS and the feedback we’re getting there. We’re also getting a lot of reviews now on our software using tools like G2 Crowd where we keep an eye on that. I think the feedback doesn’t just come from one place. We’ll look at things like the flow through Amplitude. Our clients, when they’re coming in and during the trial, are they getting stuck someplace? Are they falling off someplace? Are they falling off either at a specific page like the pricing page? Or are they falling off as soon as they get the trial because they don’t know what to do with it? We look at things like that. We look at NPS in particular after we’ve introduced new capabilities. Did our NPS go up? What’s the feedback? Are our clients truly embracing this? I think it’s a combination of things. There is a lot of information, a lot of data that we just need to stay in-tune with. We’ve got a couple of dashboards that I know my team wakes up with everyday and takes a look at, and the product team. The core product manager stayed very focused on NPS. Brian: Do you have a way of collecting end-user feedback directly? I would imagine maybe in your newer tools, it’s easier to tool some of that in, but is there any way to provide customer feedback or something to chat or any type of interactivity that’s directly in the tools that you’re creating these days? Nancy: Sure. We are rolling out more end-product nurture capability than we ever had before. That gives them the ability to chat directly within the product, as well as schedule a time with an expert. We’re working in making that even easier through a chat bot. So if you do get stuck and you’re chatting with that bot, you can schedule the appointment with an expert right there. I think there’s lots of ways to do that. I think sometimes I worry that there’s too much data coming at us but we [didn’t have enough..] before, so I’m not going to do that. Brian: Right. It’s not about data, right? It’s, do we have information? Nancy: Do we have information? Exactly. I would say my team spends a lot of time going through that, looking at Amplitude, analyzing the flows, looking in the patterns, in the orders, in the data, and the revenue. With the NPS feedback, it’s a combination of all of that stuff that really gives us a good view. As well as looking at the chat data, and analyzing some of the keywords that’s coming across on the chat, the Watson robots are constantly learning, which is great. We’re using machine learning to get smarter about what do people ask about, and that’s giving us also some good insight into the questions they ask, the patterns of information they’re searching for by product. Brian: In terms of the net promoter score that you talked about, tell me about the fact that how do you interpret that information when not everybody is going to provide a net promoter score? You have nulls, right? Nancy: Right. Brian: How do you factor that in? That’s the argument against NPS as the leading indicator. Sometimes, it’s not having any information. So you may not be collecting positive or potentially negative stuff because people don’t even want to take the time to respond. Do you have comments on how you guys interpret that? Nancy: I think you also have to look at the NPS is going to go up and down. If you have a client who has particularly a bad experience, it’s the week of thanksgiving, there was only X amount of surveys, and one of them had a bad experience that could make your NPS score looks like it drops like a rock. [right] you’ve got to look at it like the stock market. It’s more of the patterns over the long haul, what’s coming across within those patterns of information and feedback the clients are giving you. We react but you have to look at the data set, you have to look at the environmental things that are happening, and take that all into consideration from an NPS perspective. We’re very driven by that and that comes down from our CEO. She’s very cognizant, making sure that the product teams and the development teams are getting that feedback directly from the clients. As an organization—we’re a few years old—the way we used to do that is we would have these client advisory boards. It was a small number of clients that would give us feedback on our products, roadmap, and usability of that. The reality is just that then you end up building the product for 10% of your clients. Now it’s been eye-opening for us as we really open that up. Obviously, we’re still getting feedback from a larger community and client advisory board still, but NPS comments and feedback has really widen the aperture of the feedback we’ve gotten from a broader scope of clients. Brian: You brought up a good point. I had a client who luckily was cognizant of this and they did the same things where they fly their clients, they do two-day workshops, and they gather feedback from them. I was doing some consulting there and he said, “Brian, I’d like you to just go walk around, drop in some of the conversations and just listen, but take it with a grain of salt because I hate these freaking things. All we do is invite people that are willing to come for 2–3 days and tell us how much they love our stuff, it’s a free trip, we’re not getting to the people that don’t like our stuff…” Nancy: Or don’t use it. Brian: Or don’t use it at all. I love the concept of design partners, which is new, where you might have a stable of customers who are highly engaged, but that the good ones are the ones that are engaged who will pummel you when you’re stuff is not happening. They will come down on you and they will let you know. So it’s really about finding highly communicative and people who are willing to tell it like it is. It’s not, we’ll go out and find people that rah-rah, cheerleading crowd for you. Did that inspire the changes? Nancy: Even in the client advisory councils that we had—I ran a couple of them for products like Netezza for a while—we started to change the way we even ran those. I remember the biggest aha moment was, we had a client advisory board for Netezza one year and not too long ago. We decided to run a design thinking camp as part of the agenda, so that they would actually drive what they wanted from our requirements prospectus, going through the design thinking process through that. What came out of it was truly eye-opening. You know how a design thinking process progresses. I think even they were surprised at what they ended up prioritizing across the group of requirement. I think we’re really starting using differently about that feedback from clients. I do remember that day when we were looking at those things and that was not where we thought we would end up. Brian: Do you have a specific memory about something that was surprising to the group that really stuck? Something you guys learned in particular that stuck with you? Nancy: I think we focused a lot more at that point. At the time there was a lot of issues around security and what was one of our leading things going into the next version. What clients actually were not necessarily as verbal about was that, as they were using these appliances and they were becoming more mission-critical, they were doing more mixed workloads. Yes, security was still incredibly important, but what was emerging beyond that for them was workload management because they had this mixed workload that was emerging. So many different groups were jumping in with different types of workload. They have not anticipated on their [day route?] appliance, so it was something that I think came out of the next in the design thinking process that was important to them that they actually hadn’t been able to verbalize to us. Outside of that process, which was really, really interesting to us, we were on track with the requirements that we have but beyond that, the requirements that we just hadn’t thought of and quite honestly they hadn’t verbalized. Brian: You make a good point there. Part of the job of design is to get really good clarity on what the problems are and they’re not always going to be voiced to you in words or in direct statements. It’s your job to uncover the latent problems that are already there, crystalize them, so ideally whoever your project manager in the organization and your leadership, can understand and make them concrete because then you can go and solve them. When they’re not concrete and vague, like, “We need better security.” But what does that mean specifically? If you start there and really the problem had to do with the mixed workloads and managing all that, it’s like you can go down a completely different path. You can still write a lot of code, you can build a lot of stuff, and you can do a lot of releases, but if you don’t really know what that problem is that you’re solving, then you’re just going through activity and you’re actually building debt. You’re building more technical debt, you’re wasting money and time for everybody, and you’re not really driving the experience better for the customer. I think you made a good point about the design thinking helps uncover the reality of what’s there, when it’s not being explicitly stated, support requests are not going to get that type of information. They tend to be much more tactical. You’re not going to get a, “Hey, strategically I think the project needs to go this direction.” Nancy: Right and if you would have asked of us an open-ended question, you would have gotten and answer that could have been interpreted slightly differently. I think this was when I became the biggest fan of design is that, there was this magical person who was running this design camp for me that got information that I didn’t think I could get to. I mean, I knew nothing about the product. It was pretty amazing. Brian: That can happen when you also get that fresh lens on things even when they may not be a domain expert. You get used to seeing the friction points that people have and you can ask questions in a way to extract information that’s not biased. You’re not biased by the legacy that might be coming along with that product or even that domain space. It’s sometimes having jthat almost like first grade, “Tell it to me like I’m your grandfather,” or, “Explain that to me this way,” and then you can start to see where some of those friction points are and make them real. I always enjoyed that process of when you’re really fresh. Maybe this happens for other people but especially as a designer and consultant, coming into a product and a new domain, and just having that first-grader lens on it like, “Hey, could you unpack that for me?” “What is the workload in there like?” looking at you like, “What?” and you make them unpack that but you give that full honesty there to really get them to extract out of their head into words that you [and.] everyone can understand. That’s where some of those magical things happen like, “Oh my gosh. We had no idea that this was a problem,” because he or she thought it was so obvious like, “Of course, they know this,” and it’s like, “No. No one’s ever said that.” Nancy: Right. We’re experiencing that now. We have an embedded designer into our team that’s focused on our growth products. Again, she’s coming in with a complete fresh set of eyes and her perspective that she brings on the experience is just so completely different, not completely different but there are things that she flushes out we would have never see. It’s really helping because a lot of times, too, when you’re focused on the experience as opposed to the features and functions analysis, and you come down to looking at it from that perspective. I don’t want to go to development and tell them this because it’s like calling their baby ugly. But at the end of the day, the client needs to have a great experience. They need to see the value. When they’re even just trying the product out, they don’t get to that aha experience like, “I know how this will help me within 15 minutes.” We’re just not nailing it. If they can’t figure out how to jump in and use the product, we’re not nailing it. It doesn’t matter how great the product is, if they can’t figure out how to effectively interact with it. Brian: Effectively, none of the stuff really exist in their world. It just doesn’t exist because they can’t get to it. So, effectively it’s totally worthless. Whatever that island you have on the island, if there’s no bridge to get there, it doesn’t matter because its just totally inaccessible. Nancy: Right and it’s harder sometimes for even the product managers to see it. When I was sitting down in a demo of a product that we are going to be releasing, dude was cruising through the demo, my eyes were like glazed over, I just look and I was like, “Boy, we’re going to need some onboarding with that.” Great product, amazing capabilities, very complex and dense in its capability. It’s never really about whether it’s a great product. It’s about whether the client understands that’s great, when they start using it. Brian: Yeah and I think especially for analytics tools, highly technical tools used by engineers and other people that have better working in this kind of domain. Sometimes we gloss over stuff that seems like it would be totally easy or just not important. I have this specific example I was working on a storage application. It was a tool I think for migrating storage between an old appliance and a new appliance. At some point during that workload migration, something as simple as like, “Oh, I need a list of these host names and these IP addresses,” some other information that’s just basically setup-related stuff, and all the tool needed to do was have a CSV download of a bunch of numbers to be piped into another thing so that they could talk to each other. It’s not sexy. It’s literally a CSV. It was the only technical lift required, but it was not seen as engineering. It’s not part of the product. That has to do with some other product but you have to go type it into. It’s like yes, but that bridge is never going to happen. It takes them 10 years to go figure out where all these IP addresses are listed, domain names, and all these kind of stuff. It’s not sexy but if you look at the big picture, the full end-to-end arc, and if we’re all lying around, what is that A to G workflow, there’s six steps that have to happen there. This is not sexy, it’s not a new feature but this is the blocker from getting from B to E. They’re never get to A, which is where the product begins. Nancy: We definitely had those discussions in the early days about making it more consumable instead of giving it more features and functions, and can’t we really hack growth that way? That is a mind shift that if you are a design-led organization, you get it, and we believed in every part of our being that we are. Sometimes we still have that natural resistance that we really need to add more features and functions to make this product grow, but I think we’ve really turned the corner on that. Digital really has been the task for us to do that because we build the experience in the products as if there was no IBM sales team that’s going to surround you to help make you a success. That’s a very different way that we’ve done things for so many years, and the only way you can do that is by focusing on experience. Brian: You bring up a good point and I think that it’s worth reiterating to listeners. You can add these features but they do come at a cost. The cognitive load goes up. Every time we add to the tool, we’re effectively reducing the simplicity of everything else around it. Typically as a general rule, removing choice simplifies because you’re just removing the number of things that someone has to think about. So those features don’t really come for free. It’s almost like you have a debt as soon as you add the feature and then you hope you recoup it by, “Oh there’s high engagement. People are really using that,” so that was a win. If there’s low engagement with it, you just add it. It’s like Microsoft Word 10 years ago. You just added another menu bar and another thing that no one’s gonna use, and now it’s even worse. The pile continues to grow and it’s so hard to take stuff out of software once it’s in there, because you’re going to find, “You know what? But IBM’s our client, and they’re using it. IBM makes $3 million a year. We’re not taking that button out of the tool. End of story,” and now you have that short-term like, “We can’t take that out because Nancy’s group uses this.” Nancy: That’s right and we can’t point out exactly. I think my favorite story when it comes to that is the Instagram story that people talk about, where it was launched as a tool, a product called Bourbon. It had all of these great capabilities and it was going nowhere. So they dug into the usability side of things and said, “Well, what are people actually using?” which is what we do as well from an instrumentation perspective, and found that they were really only using a couple of things. They wanted to post a picture, they wanted to comment on the picture, they want to add some sort of emojis or in like system the picture and they are like, “Let’s [do.]. Let’s just do three or four things, do them really great, and relaunch the product,” and then of course the rest is history. I think that that’s a great illustration of more features and functions. If they’re not important, relevant, and consumable, all three of those things, are not going to give you growth. It comes down to, is it easy to use? Can I get value out of it? Do I immediately see that I can get value out of it? That’s all product market fit. That’s where we shifted our focus and digital’s helped us, too. That’s why my job is so cool. Brian: Cool. This has been super fun. Can you leave us with maybe an anecdote? Do you have a big lesson learned or something you might recommend to people that are either building internal tools, internal enterprise software or even SaaS products, something like, “Hey, if I was starting fresh today, I might do this instead of doing that.” Anything from your experience you could share? Nancy: For me, the biggest thing is just really focusing on product market fit because we build something sometimes to be competitively great, but not necessarily competitively great and competitively different, or that. So to understand that you not only have something that solves somebody’s problem but does it in a way that’s unique, and that’s so valuable that they’ll pay the price that’s appropriate for whatever they’ll pay for it. You’ve got to start thinking about that upfront because oftentimes, we’ll build something we’ll see a market opportunity for, but we may not truly understand product market fit whereas we know who the target is, we know what they’ll pay for this, we know what the value is, we know how to get to them, and I think you’ve got to start with that upfront, like you really got to understand product market fit or you’re never be able to grow the product. I’ve got a lot of religion around that and we really try very, very hard to create pricing and packaging around making sure we hit that, but the product has to have that value. It can’t be too overwhelming, it can’t be too underwhelming, it’s got to hit that great value spot. Brian: Fully agree on getting that fit upfront. You save a lot of time, you could solve a lot of technical debt instead of jumping in with the projects that you going to have to change immediately because you find out after the fact and now you’re starting it like… Nancy: See you in Instagram not a Bourbon, right? Brian: Exactly. Tell us where can people find you on the interwebs out there? Nancy: I probably spend a lot of time on Twitter. Maybe not so much lately. It’s been a little bit crazy but you can find me on Twitter @nancykoppdw […] or you can find me on LinkedIn. I am going to try and do better. I am on Medium. I haven’t done as good about blogging but that’s one of my goals for trying to get back on blogging. I’m usually out there on Medium or Twitter talking about growth hacking and digital transformation. I do podcast as well. Brian: Cool. I will put those links up on the show notes for anyone. Thanks for coming to talk with us, Nancy. It’s been fun. This has been Nancy Hensley from IBM Analytics, the Chief Digital Officer. Thanks again for coming on the show and hope we get the chance to catch up again. Nancy: Thank you.

Since 2013 Quiet Light's average transaction size has grown up to ten times. Back in those days, there were no private equity firms poking around the e-commerce space for these listings. Today it is a completely different story and more often than not we're seeing private equity firms come into the buyer spectrum. In fact, once a business reaches a certain size, it is more likely than not that a seller's potential buyer is going to be in the private equity space of the buyer pool. Today we are going to dissect the PE process a bit further. We'll delve into the process, the advantages and disadvantages, and give a general education on the subject for those who are curious about it how it works. Today's guest, Brian Rassel, is Vice President of Private Equity with Huron Capital. He's responsible for sourcing, evaluating, and analyzing investments made by his firm. Brian delves into ways he finds that e-commerce has entered into almost sector of investment that his group is involved in these days. Prior to joining Huron Capital, Brian was an Associate at Prophet, a global growth strategy consulting firm. Prior to Prophet, Brian was a consultant with New England Consulting Group where he led project management in their private equity practice for buy-side clients. Brian is sharing his wealth of private equity experience and how PE is entering more and more into the e-commerce space. Episode Highlights: How Brian defines private equity. How PE funds traditionally start up and get solidified. The difference between small, medium and large equity funds. The holding periods that private equity funds usually need to secure capital. Is PE all about acquiring to grow and sell or is there a category for buy and hold? Do evergreen funds exist? The difference between platform and bolt-on investments. Three things funds do to generate deal flow and types of business spaces they favor. The behind-the-scenes processes of putting a deal together. How many people are involved in the deal on the PE side. The backend investors committee and if that hinders the deal for the seller. Why time commitment is actually a good thing. How many deals Brian's PE firm evaluates per year. The defined process that gets them through the numbers. The growth potential for e-commerce – multiple appreciations and the role of private equity. Brian frames an ideal acquisition structure based on the general private equity model. Why the buyer/seller fit really matters. How private equity can work for sellers who want to get their business to the next stage. Transcription: Joe: Back in 2013 Mark I closed 23 transactions. It was a busy year for me. Do you have any idea what the average transaction size was? Mark: I … what do I guess? Well, it's you so I'm going to say like seven million dollars. Joe: I love putting you on the spot because you do it to me all the time. The average transaction size— Mark: You got to be like 250. Joe: It was 125. Mark: Holy cow. Joe: 125; very small. Mark: Okay. Joe: And at that time there were no Private Equity Firms poking around the e-commerce space for these smaller listings. Today it's a completely different story and my average transaction size was 10 times that last year. And a lot of buyers or a lot of sellers, the question I get asked all the time are who are your buyers? And it's a mix of everyone but more often than not now we're seeing Private Equity Firms come into this space. And I understand you had an expert in that area on the podcast. Mark: Yeah private equity is a topic that's coming up more and more frequently with sellers especially on the higher end of that revenue spectrum that we really work with. And it makes sense because once you get to a certain size of business your buyer is more likely than not going to be at least somewhat in the private equity place … area of the buyer pool. In addition, we've talked before … I had Ryan Tansom on and we talked about selling to a strategic buyer versus a marketplace buyer. And obviously, people always look at this especially at the higher ends and say I kind of want to have a strategic buyer. Well, one thing to keep in mind here is that this is kind of a spectrum right? It's not binary; you're either strategic or marketplace. But when you get into that private equity world, private equity is almost always going to be something of a strategic play. So I thought … look this private equity world is something that people keep asking about let's actually start to dissect it a little bit. So Brian and I talked and we spent probably about half of this interview just kind of going over what is private equity. How does that work? What is the definition of this? What are the sizes of it? And really just trying to ask some of those silly questions that maybe you kind of wonder about but don't want to ask because you don't want to sound like you don't know what you're talking about. And so we went over a bunch of those questions but then we also went over what does the process looked like. What does it look like to sell to a private equity firm? What are the drawbacks to it and what are the benefits of it as well? And really it's kind of a general education podcast but I think also … and maybe more importantly for those of you out there who are thinking about selling down the road and you're looking and trying to peg the different values that you want to get from an exit and maybe you think well I want a 10 million dollar exit or a 15 million dollar exit, if you get to that point what's it going to look like to sell to a private equity and what do you need to do to really make yourself appealing for a Private Equity Firm? And how does the deal change when you're signed to private equity as well. So we really covered a lot of ground in about 30 minutes. Brian is super knowledgeable obviously. He works in this space. And I really appreciated him coming on the podcast because … again I just downloaded a ton of information. Joe: Well let's get right to it. Mark: All right Brian thanks for joining me on the podcast. I really appreciate you coming on. Brian: Yeah I know. It's great to be here. Thanks for hosting. Mark: All right so I don't expect people to listen … my guests to have listened to the podcast in advance and I know … I don't know if Joe's been doing this, he records like 9 out of 10 episodes and I don't know if he's continued on the tradition but we like to have our guests introduce themselves mainly because you know your story better than I know your story and I figure it's a little bit easier. So why don't you give just kind of a quick 30 second to one minute rundown on who you are? Brian: Yeah I'm Brian Rassel. I'm a vice president with Huron Capital Partners which is a middle market private equity firm based at Detroit Michigan. The firm is 20 years old and has invested in … we're typically enthralled buyout investors where we'll buy a majority of a business and have done that through five successive fawns starting back in 1999. And the industries that we play in are business services, consumer, and specialty manufacturing. You know it'd kind of be interesting how I got to know you Mark for those listening is that believe it or not all of those basins are being affected by e-commerce or different kind of SaaS business models that are internet based. And I'm taking it upon myself to maybe be the person of the firm who is trying to understand those influences on all of our companies and make sure that we're in a position to incorporate those changes that are going on out and new coming at large number and being done by a lot of people who probably listen to your podcast and make sure that we're bringing more of the [inaudible 00:05:51.4] in the businesses we own so that they can be successful today and be well into the 21st century. Mark: All right, well I got a lot of questions for you because this world of private equity is encroaching or coming into the internet business acquisition world more and more. And whether it's because at Quiet Light our deal value is moving up or private equity is starting to look at different price ranges and maybe this convergence of these worlds and also private equity looking more in the online space is just becoming an increasing topic that we're seeing more and more of. We're also seeing individuals that have started up on their own raising funds to do large acquisitions or to string acquisitions together. Brian: Yeah. Mark: So what I'd like to do and I already kind of told you this in our conversation before I hit record, I'd like to go over some of the basics here of the private equity world and how it looks in the Internet space as well. And then know a little bit more about your fund and some of the things that you guys are doing over there and all that. So a quick shout out to Chris from Centurica and Rhodium I know that we've talked about him so much that it's almost as if he's a sponsor. He's not. But this is again how we got introduced. You spoke at the Rhodium and then you and I had a chance to speak after that and a good conversation. So thanks Chris for the introduction again. So let's start out really really basic here. How do you define private equity? Brian: Private equity is capital … private capital being put to work in private businesses. And so I like to name [inaudible 00:07:22.6] for folks who really don't know much about it a little quick stat just kind of on the US economy. There are half as many publicly listed companies as there were in 1996 or 1994 something like that. So even if the value of the public markets is larger the amount of places you can park that capital in the public markets is small in the total number of listed names. Private equity is a big part of either big institutionally managed money. Whether that's from insurance companies, [inaudible 00:07:52.4], pension funds, universities, those kinds of things. This is their way to go participate in the forces of economy that are still private companies that they can't get access to otherwise unless folks like me help them get access to it. It also includes folks that can kind of go into different flavors of private equity but depending on the size from the bing capitals of the world down to very very small funds that are more entrepreneurial. There's sort of every flavor under design in certain family offices and other things like that. That would be private equity, pooled private capital going into private businesses. Mark: Well how did these funds start-up traditionally? And I imagine that there's a lot of ways that they can start up. You've listed a number of sources of money and I think sometimes we forget just how much money there is in some of these places. So yeah [crosstalk 00:08:46.6]. Brian: For sure I mean there's just [crosstalk 00:08:49.4] I'm going to get this off, I'll be wrong by a hundred billion dollars. But I think something like 600 billion dollars flowed into private equity firms last year. So these … and the source of a fund or the way a fund works is that a fund manager like the folks I work for here where I'm a part of, they go out and they make their pitch about how talented their professionals are and what their track record is and the fact that they can get access to great deal flow and great opportunities, places to put private capital where it will go earn a reasonable return. And they raise this money from these other institutional or independent investors. It could be high in net worth individuals or anybody like that but … so they get started that way. They'll hold this farm estate back to the 1960s and there are new ones being created all the time. And frankly, as hedge funds have declined I believe in a large way in popularity just because of the efficiency of public markets there's been more and more money directed towards these private pools of capital and the private equity market. And when I say private equity I mean both kind of traditional buy-out funds for more mature businesses that have healthy positive cash flows on the one hand and on the other hand I mean venture capital is the son segment of private equity. And that might be for really really high growth businesses like the next dewberry of the world or whatever it might be. Mark: Right, absolutely. Okay, that makes a lot of sense. And as far as the breakdown as to sizes what would you consider to be a small private equity firm and what are we talking about in terms of their capitalization rates when they start up? What would be the difference between the small, medium, large type of firms? We can get an idea for how much money we're actually dealing with? Brian: So I would say just kind of from my understanding again all this caviada being dead this is sort of Brian Rassell's take on private equity and my interpretation and may not really be the opinions of United Capital, I can only speak for myself as an individual but they have a dedicated fund. And when I say dedicated fund these are groups of people that other folks, other investors have made a promise and a pledge that is legally binding and written their name at the bottom that that dedicated fund, the small one might be 50 million dollars. That'd be very small. Folks who are trying to invest less than that, generally speaking, have something more akin to a pledge fund. They have a number of people that they can pass the hat with to raise money in a deal by deal basis versus having committed capital to go invest in five, six, 10, 12 companies in that particular fawn. So just kind of … back at the envelope type map that you can think of is every firm should have plus or minus roughly 10 investments that have enough diversification in it. So a 50 million dollar fund is looking to put five million dollars to work in the 10 different companies. And that would be the equity capital going to those companies. There's oftentimes a mix of equity and debt coming into those companies and we could talk about that later. And then a midsize fund might be three or four hundred million up and pawn up to the 2KR's of the world or Apollo or the very big managers who are doing 15 billion dollar funds and so all different world. Mark: Very. Brian: They're taking hotels private or something like that. Mark: I was going to say they're buying something completely different than your Amazon business. Brian: Yeah that's right. It's a whole different world. Mark: All right you talked about you have successive funds. In my understanding again is that we go through these rounds of investment that coming up. We had Andy Jones from PrivateEquityInfo.com on and he talked a lot about the holding periods that private equity looks for. Can you just again quickly touch on that? We're kind of doing private equity 101 here. Brian: Yeah. I didn't hear Andy's remarks but just as it relates to a whole period I would think of it just to be linear about it that a private equity firm once our capital is raised [inaudible 00:13:01.9] the time that it takes to raise that money they committed capital or even the past they had capital they're going to take that money and let's just use this fictional 50 million dollar fund. And they'll take something like four years to deploy the first 80% of it. And the goal would be you take 20% of that money and get it into a new platform company. Companies they had no money in before. In the first year or the next year next 20%, next year next 20%, next year next 20% thus 80%. The point at that point you can't do necessarily new investments you're reserving that last 20% for either a company that's struggling that you need to give more money to to keep it going or to do an add on investment to buy something else and add it on to something that's in the portfolio. That might take four or five years to really deploy the majority of it and then another four to five … you know an investment from year one that you only … you're exiting that investment three to seven years later and let's just use five as kind of a round middle of the road number there. So an investment from year one is maybe gone in year six so it's being harvested. It could be sooner, it could be later. And the investment that was your last platform investment from year four might be heading out the door in year eight or nine. So fund life is something like eight to ten years. It can be longer. And a traditional as you kind of draw it up on the whiteboard like I have behind me here is sort of a five year hold. Now there's … I've seen many that are much much shorter and many that are much much longer but those are the fat parts of the [inaudible 00:14:36.2] if you want. Mark: Sure. So is private equity … is the goal of all private equity companies to grow and sell? So acquire, grow, sell, or are there other strategies? Buy it and hold for long periods of time? Brian: There are certainly evergreen funds out there. They're much more … when I say evergreen they have the ability to hold and recycle the capital. They may be designed to have heard of a number that has committed capital from particularly family offices that never want to do the tax consequences of becoming liquid in an investment and actually realizing the gains so they're structured to reinvest the money that they make. Or if they sell something to quickly find someone else new for it to go into. Now that would be a more unique situation. And then certainly family offices there's a number out there that looks for longer hold periods and there are certain funds that are designed for a longer hold period. Mark: All right so this is going to be again another basic question but I want to make sure our terms are all well-defined here. We hear these terms of platform versus bolt on or add on investments. Just real quick the difference between a platform investment versus a bolt on. Brian: Yeah I'll just keep it simple. I'll say anything that is a brand new business, new industry for that firm to go into. They don't currently own something in that space. Whether that's a tiny initial acquisition or a big one that would be the platform investment. So let's just say with a … I don't know Internet broker pencils, I'm just making this up, all right? And they don't have any other investments in the internet broker pencils space and they invest in a company in that space that would be the platform [inaudible 00:16:17.1] that. And maybe there are 10 companies that make … that do internet broker pencils and they buy two other ones of their competitors and they make it bigger or somebody [inaudible 00:16:25.3] and now they're putting it all together those might be add-ons to that original entity that they purchased or recapitalized. That's what we mean. It doesn't necessarily have anything to do with size which can be confusing. Sometimes you start with something small and you get the opportunity and do an add-on that's much bigger than the original investment. So it's more just where is the starting point in you can do a space or an industry. Mark: And if we think about the terms it makes sense right? Brian: Yeah. Mark: You build on top of the platform and you add-on top of the platform. So it makes … that makes complete sense. Brian: Or bolt-on, yup that's where the nomenclature comes from. Mark: Or bolt-on, absolutely. It's amazing when you dig in to definitions it's like the terms actually have a meaning and it makes sense. Brian: They do. Generally, they come from somewhere. Mark: They come from somewhere. There's logic to this stuff. I love it. All right so now I'll get into questions that I'm starting to be genuinely interested in and that is how does a fund develop a thesis or an entire direction to go after a particular platform investment? I mean if you're selling blue widgets and also if somebody comes and says no you don't need widgets what you really need are sprockets, if you don't do anything with sprockets at all how does that enter into a fund's psyche at all? Brian: There's really three things that we're doing here to generate the sort of deal flow and the ideas and spaces we want to go into. So here I'll speak more from Huron Capital. There are other firms who follow a similar philosophy potentially. So the first is businesses we didn't know about but are being represented by a broker or an investment banker like yourself Mark who … those are opportunities that are coming to us. They are being listed. They're being actively shopped around. We may have never thought of the sprocket industry before or we didn't know too much about it or we read materials on it and we say it has a lot of characteristics and things we like; great cash flow, seems very resilient, seems countercyclical, if the economy goes down it'll still do well, it's a leader on its space, any of those kinds of things. Those are opportunities that come to us and that is more of a passive thing. And then we get active once we realize that it fits a lot of criteria and we believe we could be successful with it. And that sets into motion a whole chain of things where we kind of prove out of the pieces that we might like this business and we try to get educated. The second that we spend a lot of time on is networking with executives from a broad, broad variety of industries. Those people know where there are spaces that are changing. And generally speaking, change creates opportunities. Change creates winners on one side and losers on the other side. And less be to the losers but you need that kind of disruption to create any sort of sort interesting investment outcome. The study ID is probably the market's sufficient enough that the study ID is not going to return the greatest returns. So we've spent a lot of time with executives unless I knew them about spaces that could be interesting and trying to listen to areas they know about and start to build some [inaudible 00:19:37.4]. And then even more proactively than that there's a lot of opportunities where we meet the executive who has a view of one particular thing they want to do here at Huron it's got a registered trademark or the like of the firm. We call that an exact factor investment where we will actually flip the process and say we really believe in the sprocket industry. We met Phil who is going to be our perspective CEO in the space and he has this vision that is going to totally turn the industry [inaudible 00:20:11.5]. To do that we need to go find the platform, we call that like getting fuel behind the wheel. We need to find a car to fulfill the drive. We believe he's the best driver in that industry. And we will do all the work, we'll go write a hundred page white paper on it to prove to our investment committee why it's such a fabulous opportunity and Phil is the greatest operator in this space. And then we will commit dollars into going and finding businesses in that space and find Phil the car he can drive and we'll get off to the races that way. So it starts with a commitment from our farms for a certain amount of money behind Phil to go do an acquisition more and more in this space. So it … I guess ranges from that passive we find things and then we get educated too. We educate ourselves as much as possible and align ourselves with an executive who can execute and work the process the other way. Mark: Cool. All right that [inaudible 00:21:04.07]. So let's talk a little bit about the process that goes on behind the scenes when you are evaluating an opportunity. And I think for a lot of potential sellers this sort of conversation is going to be really insightful. So let's say we have somebody that they have an e-com business, 30 million in revenue, eight, nine million in earnings on an annual basis and they've got a couple of private equity firms looking at their business. Where does that start and what is the process going through? And you can talk about maybe Huron's process and then if there are variations that you know as well. The number of people that are going to look and touch that deal as it goes through the steps. Brian: Yeah. Mark: What are some of those behind the scenes looks? Brian: Yeah so once you've got that moment where there's a couple of firms interested there's going to be an incredible amount of information about the business across insurance, benefits, compliance with laws and regulatory statutes, information about the market; anything the business can possibly produce about itself, fairly every file that's off the shelf that they have, every non-disclosure agreement they have with somebody that they on boarded or employment agreement, every contract they have with a customer, or maybe it's an industry where you don't have a lot of contracts with customers but you have a lot of contracts with suppliers. All that information needs to be made available for these perspective buyers to digest. And the more they can be made available, the more that that's organized into different pockets of legal, employee, insurance, benefits, all of that, the better. It's going to save the company a lot of time from serving requests versus being proactive by getting that stuff out there. And you know well everything here all the buyers be under a non-disclosure agreement and that's just a very kind of well-oiled machine around making that information available to give your last few buyers down to the one you would like to choose and have them under a Letter of Intent. And that starts to be an exclusive relationship where the buyer is going to spend a lot of money in due diligence and in exchange for spending that money, they would like the exclusive right to [inaudible 00:23:19.3] business for a period of time. 60 days … 90 days where they engage and here is where it starts to get to be a lot more kind of in your trousers and really analyzing your business but they're going to engage in quality of earnings earned to go and understand did you actually produce the amount of revenue, if you put it in the right time periods, if you really counted for every cost etcetera. They're going to engage legal professionals who are going first to sort of just again a full work up of registration, compliance, [inaudible 00:23:51.9] and then those folks are going to work on the actual transaction documents as well as a host of other advisors. And that would be like again a 60 to 90 day process. It could be 30 days on the short end. There are firms who can do it in that time particularly if you're a smaller business and an add-on to a much larger or a very simple business. Mark: So how many people are we talking about there that are going to be involved in the process? Outside of the consultants like a Q of E … a quality of earnings report that's going to be an outside accounting firm right? Brian: Yeah. Mark: So we're not going to— Brian: Okay so from the acquiring firm? Mark: Mm-hmm. And we can start at the beginning. We can start at your interns that are digesting deals. That's going to be part one. Brian: Sure call it four and they're going to be answering to the remainder of their firm particularly their investment committee. Ideally, it's a tighter team and there's four and if it's an add-on expect more. So you'll have the management team of that kind of platform investment as well. So four to eight and then when you get to the advisor well now you're talking 20 something more. Mark: Right, getting all those outside advisers. Now one of the things I know people get worried about during this process is you start out again with that guy who's that in deals up front and he sees some he passes it on to the team and they end up liking it so now you're dealing with a handful of people that are asking the questions digging deep in that due diligence right? Pages and pages of collecting information possibly even submitting an offer because on the surface things look okay. Brian: Yup. Mark: There seems to be these back end investors committee as well which can also kind of wash the deal far in the process. What would you say to people that get kind of frustrated when they hear that and they think do I really want to work with private equity because there are so many people that could potentially disrupt this deal? Brian: So I would think about the time investment to it. So the private equity firm is in no way interested in wasting any of their time. Huron looks at something like little over a thousand deals a year. That takes a lot of time and we're very thoughtful about moving things to the funnel and connecting our firm's resources to evaluating an opportunity. So if somebody is spending the time I would tell the listeners that they are encouraged. If everything checks out the way I told to them so far or they've written so far about that business then there are absolutely no issues. The firm, an organized and real firm is going to be thoughtful and time is kind of their most valuable resource and they're set up to be able to make a number of staged gates kind of we're interested and we're not interested. We're interested subject to confirm affirmation I want two and three. And you can have a very quick conversation like you and I are having now to say is this the case is this not the case? Here's a big concern we have, should we be worried? And they will both take your answer and that gives them that kind of gumption to proceed. And they'll probably have to go validate that as well later. And that validation just has to support what's been told to them. But they are also making a big commitment with their time in the same way that the seller is and I would take it as genuine on their part that they're not looking for it to fall apart. It's just things do. Certain deals fall apart because new information becomes available. I've seen that happen a number of times where the seller learns things about their business or thinks about their business in a way they hadn't before and can agree that that's a genuine risk and may be something they want to work out within a course of another year and then they might be back to market. Mark: Yeah, that happens often. We see that all the time even in the amount of work that we put a seller through upfront it pales in comparison to what you guys are going to be doing in your actual dig deep due diligence. And the number of times that we have people come back and tell us that was a lot of work but that was really useful. Brian: Yeah. Mark: I have learned a lot about my own business, right? Brian: Yeah a great advisor like somebody like you and using a broker who's been through and understands the questions that are going to be asked is going to save a tremendous amount of time. And we call folks like you Mark a river guide we're using on our side and we love them. Sellers use them too because they're that much more prepared for the process. Mark: Yeah. And I can tell you like the one thing that … I'm going to play both sides here, I would say the one thing that can be difficult with working with private equity is because there are so many people that can come in with a dissenting viewpoint. You're not trying to … convince is a bad word but show the opportunity to one person and have them agree to it; you're having to show a number of people. But the great thing and I love working with private equity on is that it's completely unemotional throughout the process. Brian: Yeah. Mark: I mean it really is does this check the boxes we needed to check and if it doesn't we're going to find out as quick as we can. You said something, I was going to ask this question, you guys evaluate you said about a thousand deals per year? Brian: Yeah the pipeline you think about now it's working its way down at the top of the funnel and so we're a thousand and then that's working its way down to 250 that real solid time is being spent on and then 75 that we're spending real tons of resources and traveling around to visit them … maybe 80. Now I'll get these numbers wrong this is kind of directional and then down to the 30 or so that are getting a Letter Of Intention and we'll close 22 transactions a year. Mark: Yeah so that's an amazing amount of data to be pulling in. And you guys have criteria at every stage I assume that you're looking for up front? Brian: That's right. Mark: Okay. All right that makes sense. Do you publish those criteria? I know we get a lot of just the very broad stuff sent to us. Brian: We don't only because it's just so bespoke for every company. There are so many things that really are as you just said that are check the box and we're highly confident that we will go confirm later. We're highly confident that's not an issue and we are trying to get to it very, very quickly. The three or four things we want to make sure are the reasons we're most excited and confirm that that is factual and that was going to continue. Whatever that might be; on the customer relationship or the recurring purchasing or … whatever it might be. And then at the same time the three or four things that are kind of we're concerned that could be deal killers. We believe we're spending the time because we think that's going to turn out to be true or we need to get to a yes no about is this a real problem very, very quickly. And so you know it's just they're different for every business. Mark: Yeah I know a lot of people listening right now you guys are buyers that are out there looking to acquire. So technically Brian you guys are somewhat of competitors although I think that you operate at a range that a lot of our buyers wouldn't. But I think one thing interesting that they should hear is this idea of having this defined process number one and then number two the amount of deal flow that you have to look at. I've talked to buyers that been out there looking for a year, year and a half but then you find out the number of deals that they're actually looking at doesn't really … this is a numbers game. I mean it's purely a numbers game. Brian: It is and one thing I want to say on that numbers game for us and it may be different for some of your buyers or not is that we're looking for situations that are great for us and we're also looking for situations where the seller in some ways choosing us. Now I don't want to overstate that but I do want to say that there has to be a great fit in every piece and why we're a better owner than someone else for that business. Some angle that we have, some affinity we have for what they do, or some prior experience or something. Otherwise and it could be a little different for particularly small businesses. Maybe it's a little bit less like that and it doesn't need as much of the chemistry but that's a big part of what we're looking for, for sure. Mark: And we talk about that a lot on these pockets. I know you guys are probably tired of hearing Joe and I talk about the need for a buyer being a good fit. And we talked a lot about this general concept of being likable because sellers do eventually choose and for most of these sellers they do have a choice. I mean right now it's a seller's market. They do have a choice of who they're going to work with. I want to talk about the exciting stuff. Let's talk about the actual deals; the money. Brian: Sure. Mark: Why is selling to a private equity something that people should be excited about? Brian: I think I spoke a little bit about this at Rhodium but I just … I see then the difference in multiples that are paid for businesses that are exclusively e-commerce or SaaS based businesses. Those multiples are so much lower than what private equity firms are paying for more traditional businesses out in the economy. And I believe that those worlds will come together. And I believe that businesses that are a hybrid of both or have excellence in both and are flipping both worlds are going to be extremely, extremely valuable. Because on the one hand, they have the relevance for the future, it's coming from kind of the types of businesses that you represent. And also they have that anchor of the traditional business that makes them more under writable and it makes them more predictable because it's a less dynamic place that they're out in. And so that's where I think private equity firms in the coming two, three, four, five years are number one going to become much more comfortable with standalone e-commerce business models that are exclusive that and there are going to be people participating from the much more kind of like formal private equity world participating in your markets. And then I think there's going to be a convergence where a lot of more traditional business models are going to look for the influence and the DNA as well as the revenue and the profits but the influence and the DNA and the growth that comes from the types of businesses you work with Joe. And I think that means that the market that you're playing in, the multiples will rise there. For every dollar of earnings they'll be more valuable in the future and I believe that's for now in a very significant way in 2018. Mark: Yeah and we talked about this this idea of multiple appreciation that we see. And a lot of it reaches over to the fact that this is where private equity starts to play right? So we often talk if your EBIDTA is less than a million dollars per year the … just again for the sake of a multiple, it's going to vary for each business but maybe 3 … maybe 3.5 would be the multiple on that EBIDTA depending on the type of business that you have. But once you start getting up into two, three, four million dollars of EBIDTA now we start seeing the multiples jump up in the different ranges. And the reason for this again is that we're no longer playing as much with an individual investor who really has a much higher risk profile because they don't necessarily have the entire team behind them or a portfolio behind them to be able to take some of that risk but also get the staff in the background and all the resources in private equity. Brian: Yeah. Mark: So let's talk … I am not going to pin you down because it would be a really bad idea for you to say hey we generally paid 25x on earnings which I know you don't. What does a deal structure often look like? Because I know these deals structures do change as well when we're talking about a private equity acquiring a small company. What does an ideal acquisition look like for you in terms of its structure of cash that the owner is going to be getting, maybe equity or debt that you would hope that they stay around and I'd also like to address the idea that a lot of private equity likes to have or prefers to have an owner stay on board with the new company and why that's a good thing also for that owner to think about that. So that's a lot; the general structure, the ideals for a structure. Brian: Okay so let's keep this out of your space and let's just talk about the general PE model. When deals were cheaper a couple of years ago you might get a higher ratio of debt than equity in a deal but for this sake, I'm just going to make it 50-50. I think that more reflects the market today in terms of underwriting. But let's take a deal where a private equity firm is paying at least eight times. That's still a relatively rich multiple. I could have said six but let's use eight times. So we're paying four times the earnings in their own cash that they're talking and they are going and putting the company on the hook or raising four times and they do it. Private equity firm does it but on behalf of the company of debt for the business to take on. So let's say it's a business with 10 million dollars of EBIDTA. So it's an 80 million dollar transaction and a firm like Huron is putting 40 million of equity and raising 40 million of debt in that transaction. And that 40 million of equity can come either from Huron or some portion of it could be rolled over from the seller. If that seller has no debt on the business today, no capital leases or anything else that could be thought of as indebtedness over the normal trade payables. And in your day to day you've got cash coming in and cash going out; that thing that keeps the shop running. And they have no debt on the business theoretically on the day of closing they're getting a check for 80 million dollars. If they choose to roll over some of that … let's just say 10% of the purchase price, eight million of it I would argue that a private equity firm or somebody like me would take that as them stating a high degree of confidence in the future of the business that they want to continue participating and have a relatively [inaudible 00:37:34.7] portion of their net worth tied up in that outcome. Or that they see the opportunity to turn that eight million into 16 or whatever it might be that there is a great opportunity to continue driving growth and equity value in that business. They'll … I start there that the rollover investments are very useful because if you're saying you want to do no roll over whatsoever and you just want to walk away from the business it's not conveying a lot of confidence in the future of the business. There are certainly reasons to do that but it's not conveying a lot of confidence in the future of the business. And where somebody might have been agreeing to pay you eight if you were rolling over and giving that kind of tacit support for the business going over, they might kind of say this is we're not so sure. It makes them a little more nervous and it might be a seven times deal. So you may actually be shooting yourself in the foot in terms of the total proceeds you perceive. Again so it's an 80 million dollar deal, 40 million of debt, the seller is choosing to roll over. They got their 80 million dollar check, it doesn't work like this you're actually [inaudible 00:28:28.9] but they got their 80 million dollar check and maybe we wrote one back for eight and so Huron holds 32 million of the equity and that seller holds eight million of it. So Huron owns 80% of the business and they own 20% and we've got some obligations to pay. That would be kind of the middle of the road structure. There's certainly a lot more that happens as it relates to creating incentives for management teams and that's a very, very big part of what we do to make sure that if we do well they do well and vice versa so that we're all talking in terms of growing the underlying equity value of the business. And that can often be very different for a business that didn't have that before. And it was just solely kind of the founder driving it or minding the growth of equity value. We believe in creating a broad base of ownership so that we're all on the same page. Mark: Yeah. Brian: Our management team is on incentives exclusively through their salary or bonus or both. Mark: Right so one of the things that I've talked a lot in the past especially on like the main street sort of deals is this almost dichotomy and it really shouldn't be set up as a dichotomy of a marketplace based sale where you only have an investor looking to acquire business in a strategic sale where you have a company that it would effectively be like an add-on acquisition in your world right? They already have the sort of strategic advantage to acquiring that company. Within your world, it seems like so much of what you do is going to be the strategy based type of acquisition anyways. Brian: Right. Mark: So it's like you're not going to do an acquisition unless you think that you have a strategic advantage. And when we … you and I talked out in Las Vegas back last October one thing that you talked about quite a bit was we want to pour gasoline on the fire that's already existing. So whatever that might be and so as a seller who's out there thinking about this and saying man I've been growing my business like crazy but I'm investing all this cash back into acquiring more inventory and expanding the product line and I'd like to take money off the table and then keep growing it. This is that perfect sort of handoff to a private equity because you can say you know what you [inaudible 00:40:54.0] your income statement rich in cash flow pour. Brian: Yup. Mark: We got cash. We'll help you out there. You're going to get some cash on the table and then let's grow this from a 30 million dollar business to a hundred million dollar business. Brian: Right. Mark: And so there's an incentive there for that owner to double dip that [inaudible 00:41:11.7]. Brian: Absolutely. Particularly in situations … we see this all the time where additional capital is going to be an accelerant to growth. So capital is what we have and we're trying to find a smart place to put it work and if that means we can buy a business and continue and support that business with more dollars and we believe in the strategy and what's going on in the way it's being operated there's nothing … that's the easiest dollar for us to put out versus the whole re-under writing process of a new investment. And then for that seller to have all their eggs in one basket … I don't care what their life situation is they could be in their 30's and just want to diversify or they could be somebody who's looking at kids who are about to go to college and it just doesn't make sense to have 100% of their net worth or close to it tied up in their business. And if they could diversify a little bit or generate a little bit of cash but their vision hasn't changed at all that's a great situation to bring on a strategic partner like a private equity firm. And that's where that [inaudible 00:42:11.9] fit it really matters and the chemistry between the seller. For the most part, you're not going to sell it to a private equity firm, they don't want to be in the business or definitely not in the business of operating these companies. So round the business and investing in them helping to bring the right resources to it and bring the right capital solutions or capital availability all that. Helping them set strategy and all the other things but the actual day to day operations. So it's not going to be for your sellers or for buyers [inaudible 00:42:45.1] sellers who are looking to exit the business and hand it off somebody else private equity is not going to be the right solution. But for those companies that they either want to go to be a division of something larger and they think they can be a great cross selling opportunity or the way they've built their mousetrap if just they had more to sell in the same way, and I'll say like let's say you're the number one muffler seller online and you also want to do transmissions and drive cams and stuff but you don't have the capital and you don't have the ability to go source and expand that way, going and selling to a larger entity and being that e-commerce division is a very powerful idea. Or just continue and do your own business and double down … accelerate the organic growth, private equity firm could be a great partner. Mark: Yeah, we're just about out of time in fact we've gone a bit long but one thing I wanted to emphasize here, you said that capital obviously is the resource you guys have and are able to invest and I know a lot of people that I talk to say look I don't really need money from this, the business is making money and I feel good about this. But what I find when I actually start to dig in with these guys is I say well what would it take to move to that next level. Oh well, I would have to hire out this other division or create this other division and you know okay but what's the obstacle to that? I don't want to invest in it. It often comes up. Okay, that's the area where a firm like yours can also come in and say well look we have the capital to be able to invest in this. You know what you need; do you want to invest in it to get to that next stage? And even if that means bringing in someone and you can help with that let's do it. Exactly we can do that and we could— Brian: Not to mention that I think we find that often business owners are willing to do one out of their five ideas that are like that and were willing to do all five knowing that three won't work but two should work out beautifully and we're willing to go [inaudible 00:44:39.4] the bodies of the business and the capital and have the appetite to take two steps backward to take four forward and understand that they're not going to all work. And where maybe an independent owner would do those sequentially, try idea one it wasn't really working, didn't feel pleased with making that investment and losing that cash flow, fired that new sales person who was supposed to do something else. We're willing to go do things faster and make sure that that doesn't hover around in the business and the core of what we're interested in the first place. And so we'll work through that with the business owner by giving them that support and the dollars needed to make that happen. Mark: Brian, I really appreciate you taking the time here [inaudible 00:45:19.8] some of the small questions I had but really good to get those things— Brian: No it's my pleasure. It's fine. Mark: So thanks again and maybe we'll have you back again in the future at some point. Brian: That sounds great. Yeah, I enjoyed it. Thanks, Mark.   Links and Resources: https://www.huroncapital.com/member/brian-rassel/ https://www.linkedin.com/in/brianrassel  

We’re back with a special music-related analytics episode! Following Next Big Sound’s acquisition by Pandora, Julien Benatar moved from engineering into product management and is now responsible for the company’s analytics applications in the Creator Tools division. He and his team of engineers, data scientists and designers provide insights on how artists are performing on Pandora and how they can effectively grow their audience. This was a particularly fun interview for me since I have music playing on Pandora and occasionally use Next Big Sound’s analytics myself. Julien and I discussed: How Julien’s team accounts for designing for a huge range of customers (artists) that have wildly different popularity, song plays, and followers How the service generates benchmark values in order to make analytics more useful to artists How email notifications can be useful or counter-productive in analytics services How Julien thinks about the Data Pyramid when building out their platform Having a “North Star” and driving analytics toward customer action The types of predictive analytics Next Big Sound is doing Resources and Links: Julien Benatar on Twitter Next Big Sound website Next Big Sound blog The Data Pyramid model Quotes from Julien Benatar "I really hope we get to a point where people don’t need to be data analysts to look at data." "People don’t just want to look at numbers anymore, they want to be able to use numbers to make decisions." "One of our goals was to basically check every artist in the world and give them access to these tools and by checking millions of artists, it allows us to do some very good and very specific benchmarks" “The way it works is you can thumb up or thumb down songs. If you thumb up a song, you’re giving us a signal that this is something that you like and something you want to listen to more. That’s data that we give back to artists.” “I think the great thing today is that, compared to when Next Big Sound started in 2009, we don’t need to make a point for people to care about data. Everyone cares about data today.” Episode Transcript Brian: I’m really excited today for this episode. We have Julien Benatar on the show and he’s from a company that I’m sure a lot of people here know. You probably have had headphones on at your desk, at home, or wherever you are listening to Pandora for music. Julien , correct me if I’m wrong, you were the product manager for artist tools and insights at Next Big Sound, which is a type of data product that provides information on music listening stats to, I assume, artists’ labels as well to help them understand where their fans are and social media engagement. I love this topic. I’m also a musician, I have a profile on Next Big Sound and I feel music’s a fun way to talk about analytics and design as well because everybody can relate to the content and the domain. Welcome to the show. Did I get all that correct? Julien: Yeah, it was perfect. Brian: Cool. Tell us a little about your background. You’re from France originally? Julien: Yes, exactly. I grew up next to Paris, in Versailles more specifically, and moved to New York in 2014 to join Next Big Sound. Brian: Cool, nice. You’ve been there for about four years, something like that. You have a software engineering background and then now you’re on the product side, is that right? Julien: Exactly yes. I joined the company back when we were a startup. Software engineering was perfect, there was so much to do. To our move to Pandora, I moved to a product manager role around a year ago. Brian: Next Big Sound was independent and then they were acquired by Pandora. I assume there is good stuff about your data. Why did Pandora acquire you and how did they see you guys improving their service? Julien: We got acquired in 2015. The thing is, Next Big Sound was already really involved in the music industry. We already had clients like the three major labels and a lot of artists were using us to get access to their social data. I think it was a very natural move for Pandora as they wanted to get closer to creators and provide better analytics tools. Brian: For people that aren’t on the service, I always like to know who are the actual end users, the people logging in, not necessarily the management, but who sits down and what are some of the things that they would do? Who would log in to Next Big Sound and why? Julien: Honestly, it’s really anyone having any involvement into the music industry, so that can be an artist, obviously, try looking to try their socials and their audience on Pandora. But you can also be a booker trying to book artists in their town. We have a product that can really be used by many different user personas. But our core right now is really artists and labels, having contents on Pandora and trying to tell them the most compelling story about what they’re doing on the platform. Brian: When you think about designs, it’s hard to design and we talk about this on the mailing list sometimes but it’s really hard to design one great thing that’s perfect for everybody so usually you have to make some choices. Do you guys favor the artist, or the label, or as you call them,the bookers or whom I know as presenters,in the performing arts industry? Do you have a sweet spot, like you favor one of those in terms of experience? Julien: I think it’s something we’re moving towards, but it hasn’t always been this way. Like I told you, we used to be a startup or grow us to make a product that could work for as many people as possible. What is funny is we used to have an entity on Next Big Sound called Next Big Book where we used to provide the same type of service for the book industry. If anything, it’s been great to join Pandora because then we could really refocus on creators and it really allowed us to, I believe, create much better and more targeted analytics tools to really fulfill needs for specific people like artists and labels. Brian: I would assume individual artists are your biggest audience or is it really heavily used by the labels or who tends to... Julien: I think it’s pretty much the same honestly. I think the great thing today is that, compared to when Next Big Sound started in 2009, we don’t need to make a point for people to care about data. Everyone cares about data today. I think that everyone has reasons to look at their dashboards and especially for a platform like Pandora with millions of users every month. Our goal is really just telling them a story about what does it mean to be spinning on the platform and the opportunities it opens. Brian: You talked about opportunities, do you have any stories about a particular artist or a label that may have learned something from your data and maybe they wrote to you or you found out like in an interview how they reacted like, “Hey, we changed our tool routing,” or, “Hey, we decided to focus on this area instead of that area.” Do you know anything about how it’s been put into use in the wild? Julien: Yeah, it’s used for so many different reasons. For the people who don’t use Pandora, something I really like about the platform is it’s really about quality. As you use Pandora, you have the opportunity to thumb up or thumb down songs and as you do, you’re going to get recommended more songs like the ones you like. It’s really about making sure that you get the best songs at all times. The reality then is that for artists, their top songs on Pandora can be pretty different than their top songs on other platforms because sometimes their friends are going to be just reacting more to some part of their catalog than another one. I’ve heard many times of artists changing their playlists in looking at which songs where their fans thumbing up the most on Pandora. Brian: Could you go through that again? How would they adjust their playlist? Julien: Usually, people use Pandora as a radio service. While we already have internet today, most people are listening to the radio because they’re usually are very targeted and it just works really well. The way it works is you can thumb up or thumb down songs. If you thumb up a song, you’re giving us a signal that this is something that you like and something you want to listen to more. That’s data that we give back to artists. We tell them, “This are your most thumbed songs on Pandora. These are the songs that people engage with the most on the platform.” Looking at this data, you can actually inform them songs that they believe they should be playing more on the store. Brian: I see. A lot of it has to do with the favoriting aspect to give them idea what’s resonating with their audiences. Julien: Qualitative feedback, yes. Brian: Got it. Actually, it’s funny you mentioned the qualitative feedback. In preparation for this, I was reading an article that you guys put out back in March about a new feature called weekly performance insights, which is really cool and this actually reminds me of something that I talked about in the Designing for Analytics mailing list, which is the act of providing qualitative guides with your analytics. A lot of times they analyze for turnout quantitative data and whenever there’s an opportunity to put stuff into context or provide qualifiers, I think that’s a really good thing and you guys look like you’ve have done some really nice things here. I’ll paraphrase it and then you can jump in and maybe give us some backstory on it. One of the things that I think is really cool is there're concepts of normalcy in here so that, if I’m an artist and I look at my numbers, I have an idea. For your Twitter mentions, for example, you say, “For artists with 26,000 followers, we expect you to get around 44 mentions.” When you show me that I have 146 mentions, I can tell that I’m substantially higher than what my social group would be. I think that’s a really fantastic concept that people not in music could try to apply as well which is, are there normalcy bans where you’d want to sit? Is there some other type of group, maybe, an industry, or apparent group, or another business unit, whatever it may be to provide some context for what these out of the blue numbers mean that don’t have any context? How did you guys come up with that and can you tell us a bit about the design process of going from maybe just showing, “You’re at 826 apples,” as compared to what? How did you move from just a number into this these kind of logical groupings where you provide the comparisons? Julien: I think what’s really fascinating is, we really live in an age of data. As an artist, you need to be on social media for the most part. There still a lot of artists I listen to but just decide not to. It’s part of things but at the same time, real big success in the music industry didn’t change. It’s still being on the Billboard chart, getting a Grammy and all these things. But as we see this, we have millions of artists looking at their data every day and just are not able to understand, like is it good or is it not good. Everyone starts at zero. We have a strong belief that data can only be useful when put in context. Looking at the number on its own can give you a sense of how things are doing but that can also be dismissive. An example is, a very common way to look at data is to look at a number and look at the percent changing comparison to the previous week. You’ve got a bunch of tables and you look at, am I growing or am I not growing. The reality is it’s actually impossible to always have a positive percent change. There’s no artist in the world that always does better week by week. Even Beyonce, I can assure you that the week she released Lemonade, she had more engagement on Twitter than the week after. With that in mind, we really try to give a way for artists to understand how are they doing for who they are and where they are currently in their career. Next Big Sound started in 2009. One of our goals was to basically check every artist in the world and give them access to these tools and by checking millions of artists, it allows us to do some very good and very specific benchmarks. For an artist, like the example you said, for instance an artist with a thousand Twitter mentions in a week, is it good or bad in comparison to their audience size? This feature comes because that’s just the question we’re asked. Artists want to know is it any good? What does this number actually mean for me? That’s why we really wanted to, in some ways, get out of being a content aggregator platform and really be a data analytics platform. How can we actually give information that can help artist make better decisions? Brian: I remember the first time I got what I would call an anomaly detection email from your service and it was about some spike in YouTube views or something like that. I thought it’s fantastic in two reasons. First of all, you identify an anomalous change and I think in this case it’s a positive anomalous change. That tells me that I should log in the tool. Secondly, you proactively delivered that to me. On the Designing for Analytics mailing list, we talk about is that user experience does not necessarily live inside your web browser interface or your hard client or whatever you’re using to show your analytics. Email and notifications are a big part of that. Can you tell me about how you guys also arrived at when you pushed these things out and maybe talk about this little anomaly detection service that you have? Julien: It all started when we got acquired by Pandora. We decided to just invite a bunch of users and just talk to them, understand how to use our product and what did they think about it. We had artists, managers, and label people come over and we just talk to them and basically they all said, “We love it.” But then, by looking at their actual usage, they don’t use it that much. I guess one of their questions was when should I be looking at my data? Everyone is very busy. As you’re an artist, you need to perform, you need to write music, you need to engage with your fans and same goes with everyone. When should I look at data? The reality is by being a data company, we do get all the data, we have all the numbers. We have ways to know when things are supposed to be known, when artists should be acting on something. We just turn this into this email notifications. Anytime we notice that an artist is doing better than expected, we just let them know right away. Brian: That’s great. Do you do it on the opposite end too? If there’s an unexpected drop or maybe like, “Oh, you put a new track out and your socials dropped,” or something like that, do you look at the negative side too or do you tend to only promote the positive changes? Julien: As far as pushes, we decided to only do push for positive. But as you mentioned weekly performance, weekly performance can give you some negative insights, like, “You’re not doing as well as artists with the same size of audience as yours.” The reason we didn’t do it for our notification is, anomalies are really hard to completely control. A reason, for instance, is Twitter removing bots. Basically, every single artist would have had an email telling them, “You lost Twitter followers this week.” It was a lot of work to really tune our anomaly factor to actually only send emails when something legitimate happens. That’s the reason we only decided so far to do it for positive but we actually have been thinking about doing the same for negative but that’s another type of work. Brian: Yeah, you’re right. You have to mature these things over time. You don’t want to be a noise generator. Julien: Exactly. Brian: Too many, then people start to ignore you. I’ve seen that with other data products I’ve worked on which just have really dumb alerting mechanisms that are very binary or they’re set at a hard threshold and just shootout noise and people just tune it out. Julien: I’m glad you mentioned this because this feature was in beta for a year for that specific reason. Brian: Got it. Julien: We had to learn the hard way. We had like a hundred beta users. We’ve got way too many emails because anytime there were an anomaly anywhere, they would just get an email. For the most part, it was things that were supposed to help them. If a notification becomes noise, then that’s absolutely against its purpose. Brian: I don’t know if everybody knows how the music business works, at least from the popular music side, but just to summarize. You have individual artists that are actually performers. They may or may not have an artist manager which takes care of their business affairs, represents them like negotiations with people that book shows. Then you have labels which are sort of like an artist manager except they’re really focused on the recording assets that the artist makes and they actually tend to own the recordings outright at the beginning and then over time, the artist may recoup through sales they make it the ownership act and the sound recordings they make. Of those kinds of three major groups, is there a one that’s particularly hungry or you’re the squeaky wheel that is most interested in what you’re doing? Julien: I really think that into these three groups, we have a subset of users that are really into the data and into the actionability of it. I don’t think it’s one specific group of user. It could be all around the industry like we have the data-savvy, they really want to know. We have some users that actually would rather get more notifications even if they need to on their end to figure what is right from what is wrong. But since we have such a wide user base of different type of people, we decided to go on the conservative side and make sure to only share things that we thoroughly validated through all of our filters. Brian: I assume that your group reports into some division of Pandora, I’m not sure of that. Are you reporting into a technology, like an IT, or a business unit, or marketing? Where do you guys fit in the Pandora world? Julien: We’re part of the creator’s tools. I don’t really have a perfect answer to this. Brian: Okay. I guess my main question being, because when we talk about designing services, we talk about both user experience, which is the end user thing and about business success or organization success. I’m curious, how does Pandora measure that Next Big Sound as delivering value? I can understand, I’m sure our artist can understand how the artists value it through understanding how is my music moving my audiences, et cetera. Is there a way that Pandora looks at it? Are they interested in just time spent? The analytics on the analytics, so to speak, is what I’m asking about. How do you guys look at it like, “Hey, this is really doing a good job,” or whatever? Do you know how that’s looked at? Julien: To be honest, I think you said it right. Our goal is to help artists make their decisions through data and having artists use the platform is currently the way Pandora sees us doing a good job. Actually, it hasn’t changed that much since our acquisition. One of our main KPI for the past and couple of years is something I would call insights consumes. Just making sure that our users, artists, anyone using Next Big Sound are consuming data. That can be them logging into the website or that can be them opening one of our notifications. But so far that was our main KPI. We’re trying to work on some more targeted KPI, potentially like actions taken, that would be the North Star, but we're still working on how to do that right. Brian: Do you guys facilitate actions, so to speak, directly in the tool or are there things people can do with those actions really take place outside of the context of Next Big Sound? Julien: There are actions that artists can take to the other creator’s tools provided by Pandora. For instance, artists have the ability to send audio messages to anyone listening to them. If they go on tour into the US, they can have targeted messages in every single song they’re going to play. If anyone listens to them there, they can just click and buy a ticket. We’re working to make sure that artists are aware of these tools because they are free and they’re generally helping them grow at their careers. But regarding external actions, so far we don’t have any one-click way to tweet at the right time to the right people or with the right content or anything like this. Brian: Sure and that’s understood. Not every analytics product is going to have a direct actionable insight that comes right out of it. You guys may be feeling a longer term picture about trending and maybe for a certain artist to get an idea if they’re releasing music fairly frequently, what stuff is working and resonating, and what stuff is not. I can understand that. There may not be a button to click as a result immediately. Julien: That’s the goal though. Everything we do right now is going towards this objective. Maybe I can tell you a little about the way we think about data and that can give more sense to it. In order to work on any new feature, we follow this concept called the data pyramid. It’s something that you can Google. There’s a Wikipedia page for it. Let me explain to you how it works. The data pyramid, it’s a pyramid formed of four layers. It could be upon each other and each representing an exquisitely useful application of data. At the bottom of the pyramid we have the data layer. Any sort of data that we may have. For our case, Android data, Twitter, Facebook just getting the numbers, getting the raw data. On top of it, we have the information layer. The information layer is going to be ways you have to visualize this data. I guess it’s like the very broad sense of analytics. We’re going to give you tables, graphs, pie charts, you name it. We’re giving you ways to craft stories about this data but it’s on you to figure it out. Then on top of it we have what we call the knowledge layer. That’s where things start to get interesting. The knowledge layer is the contextual part of it. It’s like, “What do this number actually mean?” It has industry expertise. For instance, the way we’re going to work about it for musicians and their true data may be different than any other industry. The knowledge layer goes like a weekly performance. It’s a perfect answer to it. It’s what does it mean for me as a musician with a hundred fans to get two mentions this week. Same for notifications. It’s telling you that you should be looking at your data right now because something is happening. That’s how we get to the North Star and the last part of the data pyramid which is intelligence. The goal of intelligence is actionability. Now that I get to understand what does this number mean to the specific context, what should I be doing? Following your question, everything we’re trying to do here is to get to a point where we can just send an email to an artist and tell them, “Hey, you should be doing this right now because, with all the data that we have, we believe that this is going to have the highest impact for you.” Brian: It‘s really fascinating that you just outlined this data pyramid. I actually haven’t heard of this before. It made me think of one of the kind of, it’s not a joke but in the music community, I’m also a composer and when we write stuff, the kind of running joke is like nothing is new. Your ideas for this new song or this new melody I’m composing, it probably came before you. You heard it there before. I wrote a post on my list that was pretty much exactly the same thing except the knowledge layer. I was calling that insight. Data have been this raw format and information being the first human-readable format that’s like say going from raw data to a chart, a histogram. Now I have a line on a chart and then the insight layer being, I have a line on the chart and another line comparing it to like you said, average, or my social group, or a parent group, or some taxonomy, or an index. Then the action or the prescription for what to do or the prediction those that kind of lead you in about action which would be that fourth state. You’re like, “Oh, is this really a new concept?” It’s like, “Nope. Someone else already thought of that.” I totally want to go read about this data pyramid. Julien: That’s amazing. Brian: I’ll find that link to the data pyramid and I’ll put that in the show notes for sure. I thought that was really funny. Julien: It’s funny that you called it insight because that’s the way we call a lot of our features are working out. The way we define insight is bite-size, noteworthy, sharable content. How can we get into the noise of all of the data that only gives you exactly what you should be looking at. That’s how we got into notification and weekly performances. This is the one thing you should be looking at. Brian: I understand what you’re getting at there. The insights are, like you said, bite-size chunks of interesting stats that someone can put some kind of context around. That’s great and it’s good. One of the things I liked, too, that you talked about was you said, “Oh we got like a hundred users, like a beta group and that kind of inspired some of this.” Your product response to how do we help people know when to come and look at our service. I think this is really good because one of the problems that I see with clients and people on the list, I think is low engagement. This is especially true for internal analytics companies. Low engagement can be a symptom of a difficult product, it doesn’t provide the right information at the right time, it may not have a lot of utility, or it’s a resistance to change. People have done something the old way and they don't want to do it the new way. One of the recipes you can follow if you’re trying to do a redesign or increase engagement is to involve the people that are going to use the service in the design process, both the stakeholders as well as the end customers. This is especially true again for the internal analytics people. Your customers or other employees and your colleagues. By engaging them in the design process, they’re much more likely to want to change whatever they’re doing now. I loved how you guys did some research. Now I want to ask, do you frequently do either usability testing or interviews? Is that an ongoing thing at your company or is it really just in front of a big feature release or something like that? How do you guys do this research? Can you tell me about that? Julien: Of course. It’s consent. We haven’t released any major feature without doing some heavy user testing. I’m very lucky to be working with two designers, Justin and Anabelle who are very user-focused. Honestly, if you come to our office, at least every week we’re going to have some user interview and just talking to them, showing them prototypes, and just see how do they play with it. Brian: So you’re doing a lot of testing it sounds like. That’s fantastic. Julien: At the same time it’s always to find the right balance because you could be overtesting things too. We really are focusing on user testing for new things and make sure that the future that we are working on actually answers their user story that we intended. Brian: I don’t know how involved you get participating in these, but do you have any interesting stories or anecdotes that you got from one of those that you could share? Julien: Let me think. I do participate into a lot of them but I’m not sure I have an example right now. Brian: Are most of the people you interview, are they current users of Next Big Sound or do you tend to focus on maybe artists that haven’t experienced the service yet or you mix it up? Julien: We mix it up. We mostly engage with users that we already have but then we can decide to go with users that haven’t used the platform for a while, or more active users if you want to understand how we’re useful into their day to day. What I would say is that, surprisingly, it’s very easy to get users to chat about their experience with the product. I didn’t assume that we would get so many responses when we tried to have people come over or just hop on the zoom to check a new feature. Brian: I’m glad you actually mentioned that because I think in some places, recruiting is perceived to be difficult and it probably isn’t. Maybe you haven’t done it before but as I tell a lot of my clients, a lot of people love to have someone listen to them talk, tell them all about their life and what’s wrong with it, and how it could be better with their tools. They love having someone listen to them and especially if they know that their feedback is going to influence a tool or a service that they’re using. They tend to be pretty engaged with it. I find it’s really rare that I do an interview with a client’s customer and they don’t want to be included in the future round like, “Hey, when we redesign the service, can we come back to you and show you what we’ve done?” “Oh, I love to do that!” Everybody wants to get engaged with it. There are places where recruiting can be difficult when it’s hard to access the users, some of the enterprise software space that can be an issue sometimes. But generally, if you can get access to them, they tend to be pretty willing to participate. I’m glad you mentioned that. Julien: I think the great part about testing with current users on the platform is to actually show them prototypes with real data, not just show them an abstract idea that we want to work on. As soon as they can see what we’re working on apply to their own career as musicians, for instance, that can lead to fascinating discussions. Brian: You made a really good point on the real data thing. I remember as far back as 10 years ago or whenever, I use to work at Fidelity Investments, we would see this issue when we’re working on the retail site for investors. When you show a portfolio that, for example, has Apple stock trading at $22 in it, you’re not really there to test what is the price of Apple stock but you might be testing something entirely different and the customer cannot bear what is going on? They’re so stuck on this thing. It’s all fake seed data in the prototype. The story here being if you’re a listener, when you test it’s important to have at least realistic data. You don’t want to have noise in the test or whatever your studying or else you can end up on this tangent. Try to make the numbers looks somewhat realistic if you’re using quantitative data. In some cases, people can be taught to roleplay. Pretend you’re Drake or pretend you’re some big artist and then they can get their head around why they have billions of streams instead of thousands which they’re used to. Julien: Absolutely. That also helps us just build better products because the reality is we have a lot of artists with maybe 10 plays in a month. As we build visualizations like something that we built a line of looking at Drake’s data, it’s not going to work as intended for a smaller artist sometimes. Having real data involved as soon as possible into the design process has been such a game changer for us. We really have a multidisciplinary team involved into the research and design of everything we do. I’m working with a data scientist, data engineer, a web engineer, and designer on a daily basis. Obviously, we all have our things to do. But as we get into creating something new, we just make sure to have someone helping us get the real data, interview the right user, and just create prototypes as soon as possible. Working with prototypes is essential into building useful data analytics tools. Brian: Yes, you do learn a lot more with a working prototype. It’s not to say you can’t test with lower fidelity goods, especially early on but for a service like yours when the range of possible use both the personas and also you’ve got the Drakes of the world, big major label artist and then down to really small independents, it’s really important to have an idea how your charts are going to scale, and what’s going to happen with data. Even just small stuff like how many decimal points should you be showing on a mobile device, some of the numbers might cram up. Julien: Exactly. Brian: All this stuff that you never think, if you only look at one version of everything, you can end up with a mess. I’m glad that you brought that up. Julien: I couldn’t say better. The decimal is actually something that we’ve had to discover through real data. Brian: To all of you in the technical people out there, I will say this. If I’ve seen one trend with engineers, is they love precision and there’s a lot of times when there’s very unnecessary precision being added to numbers. Such as charts and histograms. Histograms are usually about the trend, they’re not about identifying what was the precise value on this date at this time. It’s about the change over time. Showing what’s my portfolio worth down to three digits of micro-cents or something like that is just unnecessary detail. You can probably just round up to the dollar or even hundreds of dollars or even thousands of dollars in some cases. It actually is worse. The reason it’s worse is that adds unnecessary noise to the interface, you’re providing all these inks that someone has to mentally process, and it’s actually not really meaningful ink because the change is what’s important. Think about precision when you’re printing values. Julien: This concept of noise is so essential today for any data analytics tools. There is so much data today. There is data for everything. I think it’s our responsibility as a data analytics company to make sure what are we actually trying to help our user with this data set is not just about adding new metrics. Adding new metrics usually is just going to add noise and not be helpful in comparison to fairing what do they need to make the right decision. Brian: Right. Complexity obviously goes up. The single verb, ‘add,’ as soon as you do that, you’re generally adding complexity. One of the design tools that is not used a lot, and this is something I try to help clients with is, what can we take away? If we're not going to cut it out entirely, can we move this feature, maybe this comparison to a different level of detail? Maybe it’s hidden behind a button click, or it’s not the default. But removing some stuff is a way to obviously simplify as well, especially if you do need to add new things. Your only weapon is not the pencil, you’ve got the eraser as well in the battle so to speak. Julien: I couldn’t agree more. On Next Big Sound we have this concept of artist stages. It’s a way for us to put artist into buckets and by looking at their social instrument data. It goes from undiscovered to epic. We do that by looking at all of the data we have and looking at it in context. I don’t have the numbers right now because they update on a daily basis but every artist starts undiscovered. For instance, as they get 1000 Facebook likes, maybe they’re going to get to a promising stage. We have all of these thresholds moving everyday looking at trends among social services. But what is interesting is that for instance, for a booker, a booker doesn’t need to look at the exact number of Twitter followers for an artist. He needs to know that he’s booking for a midsized venue in the city he’s in and he’s probably going to be looking for promising to established artists and not looking for the mainstream to epic artists. It’s always about figuring a way to use the numbers to tell the story. Brian: I’m totally selfishly asking for myself here, but I was immediately curious. I live in Cambridge which is in the Boston area, and I am curious who are the big artists in our area and what is the concentration? I’m in a niche. I’m more in the performing arts market, in the jazz, in world music, and classical music but I’m just curious. Is there a way to look at it by the city and know what your artist community looks like? You guys do anything like that? Julien: We don’t currently. But I think YouTube has actually a C-level chart available. It’s not part of something we do because I think the users it would benefit are not the users we specifically try to work on new features. It’s more something for bookers than artists ,specifically ,but it’s exactly the type of thing that we need to think about when we prioritize new features. Brian: I’m curious just because the topic’s fairly hot. Everybody is trying to do machine learning projects these days. I don’t like the term AI because it tends to be a little bit overloaded but are you guys using machine learning to accomplish any particular problems or add any new value to your service right now? Is that on your horizon? Julien: How do you think about machine learning? Brian: A lot of times I associate it with predictive analytics or understanding where you might be running instead of just using statistics. I don’t know what kind of data you might have for your learning that you can feed in but maybe there’s aspects about artists that can predict. Especially, I would think like in the pop music world where there tends to be more commercialization of the music, I would say, where it’s like we need a two-minute dance track at this tempo specifically because DJs are going to play it. It’s a very commercial thing. It’s very different than what I’m used to. So I’m curious if there’s a way to predict out how an artist may do or what kinds of tracks are performing well. Like these tempo songs, we predict over the next six months that tech house music at 160 beats for a minute is going to do really well based on the trending. I don’t know. I’m throwing stuff out there. The goal, obviously, is not to try to use like, “Oh Home Depot has this new hammer, let’s run out and get it. We don’t even know what it’s for but everyone else is buying it.” That’s how I joke about machine learning. It’s like you need to have a problem that necessitates that particular tool. I don’t ask such that, “Oh there should be some.” I’m more curious as to whether or not it’s a tool that you guys are leveraging at this time. Julien: The Next Big Sound team doesn’t worked on features following the musical aspects of things. We really are focused on the user data. Brian: Engagement and social. Julien: Engagement data mostly, yes. But at the same time, I’m sure teams have worked on this because of the way that genome works. We have a lot of data about the way songs are made. Regarding machine learning, on the Next Big Song team, we actually have something that is called the prediction chart. You said predictions. We have this chart that is available every week. Basically, it really goes back to having data for a long time. The fact that we’ve had data since 2009, we’ve been able to see artists actually get from starting to charting on the Billboard 200. By having all of these data, we’ve been able to see some trends, some things that usually happen for artists at specific times in their career up until they get into the Billboard 200. We actually do have some algorithms that allow us to apply this learning to all of the artists on Next Big Sound right now and have a list every week of artist that we believe are most likely to appear on the Billboard 200 chart next year. Brian: I see. Got it. Do you track your accuracy rate on that internally and change it over time? Do you adjust the model? Julien: Yeah, we do. Brian: Cool That’s really neat. Tell me, this chat has been super fun. I’ve selfishly got a little indulgent because being a musician, it’s fun to talk about these two worlds that I’m really passionate about so I could go on forever with you about this. But I’m curious. Do you have any advice for other product managers or analytics practitioners about how to design good data products and services? How to make either your own organization happy or your customers happy? Do you have any advice to them? Julien: Yeah, of course. I guess it’s all about asking questions, honestly. What is very good with working at Next Big Sound is that it all started in 2009. Maybe actually I can go back and tell you the story about how it started and why it’s so different today. It started in 2009. It was actually a project, a university project by the three co-founders. Basically, they were wondering about one thing. How many plays does a major artist get on the biggest music platform in the world? At that time, it was MySpace. The artist they picked was Akon. Basically, they just built a crawler, went to bed, woke up, and discovered that an artist like Akon was getting 500,000 plays on MySpace in one night in 2009. The challenge in 2009 was to get the data. That’s why for the most part in Next Big Sound as it started was, I really think a data aggregation tool. Our goal was to get as many sources as possible and just make them easily accessible into the same place. We really are much into the information layer here. We’re giving you all the numbers and you can compare Tumblr to Vimeo, to YouTube, to Twitter, to Facebook, to Vine, to you name it into a table or a graph that you want to. The reality is, today things change. We don't need to fight to get data anymore. We don’t need to hike our way into getting the numbers. Now, data is accessible to everyone in a very easy way. It’s kind of a contract. You, by being an artist, you know you’re going to get access to your Spotify, YouTube, Pandora, Apple Music or any other platform data very easily just by signing up and authenticating as an artist. That’s where our goal changes. Thankfully, we don’t need to convince people to care about data, we know they do already. But now the challenge is different. Now, the challenge is to make them understand what does their data mean and how can they turn it into getting even more data, getting into having even more engagement, and having even more plays. I think that’s something that is very interesting because it really resonates into the question we’ve been asked in the past few years like, “What does my data mean and when should I be looking at my data?” If anything, these two things correlated pretty well. People don’t just want to look at numbers anymore, they want to be able to use numbers to make decisions. That’s the core of what we’re trying to achieve today. We couldn’t be there if we didn’t have users that ask us the right questions. Brian: Cool that’s really insightful. Just to maybe tie it off at the end and maybe you can’t share this but what’s your home run? What is your holy grail look like? Is there a place you guys know you want to get? Maybe it’s the lack of data or you don’t have access to the data in order to provide that service. Do you guys have kind of a picture of where it is you want to take the service? Julien: What is very noble about our goal at Next Big Sound specifically is we’re here to help artists. The North Star would be to make sure that any artist at any time in their career is doing everything they can do to play more shows, to reach to more people, and to make sure their music is heard. Brian: Nice. I guess it’s like you’re already there, just maybe the level of quality and improving that experience over time, that’s your goal. It’s not so much that there’s so much unobtainable thing at this moment. Is that kind of how you see it? Julien: I think the more we don’t feel just a data analytics tool, the more we’re getting to that goal. I really hope we get to a point where people don’t need to be data analysts to look at data. We’re always going to provide a very customizable tool for the data-savvy because they know what they need more than we can ever do it for them. We want to make sure that for everyone else, we can just make it very easy and as simple as a click for them to do something that’s going to impact them positively. Brian: Cool, man. This has been really exciting to have you on the show. Julien, can you tell the listeners where can they find you on the interwebs? Are you on Twitter or LinkedIn? How do they find you? Julien: For sure. @julienbenatar on Twitter, nextbigsound.com is free for everyone. Actually, we made our data public recently, so if you ever want to learn more about what we do, please check it out. We try to post on our blog about what we learn through data science, through design, and share more about why we build what we build. I recommend to just check blog and do some commitment to learn more about what we do. Brian: I definitely recommend people check out the site. The fun thing is again, as you said, it’s public. If there’s a band you like or whatever, you can type in any group that you like to listen to and you can get access to those insights. Just kind of get a flavor of what the service does. I’ll put those links in the show notes as well as the data pyramid. Julien, cool. Thanks for coming on. Is there anything else do you like to add before we wrap it up? Julien: No, thank you so much. I love reading your newsletters and I’m very happy to be here. Brian: Cool. Thank you so much. Let’s do it again. Julien: Cool. Brian: Cool. Thank you. We hope you enjoyed this episode of Experiencing Data with Brian O’Neill. If you did enjoy it, please consider sharing it with #experiencingdata. To get future podcast updates or to subscribe to Brian’s mailing list where he shares his insights on designing valuable enterprise data products and applications, visit designingforanalytics.com/podcast. 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We’re back with a special music-related analytics episode! Following Next Big Sound’s acquisition by Pandora, Julien Benatar moved from engineering into product management and is now responsible for the company’s analytics applications in the Creator Tools division. He and his team of engineers, data scientists and designers provide insights on how artists are performing on Pandora and how they can effectively grow their audience. This was a particularly fun interview for me since I have music playing on Pandora and occasionally use Next Big Sound’s analytics myself. Julien and I discussed: How Julien’s team accounts for designing for a huge range of customers (artists) that have wildly different popularity, song plays, and followers How the service generates benchmark values in order to make analytics more useful to artists How email notifications can be useful or counter-productive in analytics services How Julien thinks about the Data Pyramid when building out their platform Having a “North Star” and driving analytics toward customer action The types of predictive analytics Next Big Sound is doing Resources and Links: Julien Benatar on Twitter Next Big Sound website Next Big Sound blog The Data Pyramid model Quotes from Julien Benatar “I really hope we get to a point where people don’t need to be data analysts to look at data.” “People don’t just want to look at numbers anymore, they want to be able to use numbers to make decisions.” “One of our goals was to basically check every artist in the world and give them access to these tools and by checking millions of artists, it allows us to do some very good and very specific benchmarks” “The way it works is you can thumb up or thumb down songs. If you thumb up a song, you’re giving us a signal that this is something that you like and something you want to listen to more. That’s data that we give back to artists.” “I think the great thing today is that, compared to when Next Big Sound started in 2009, we don’t need to make a point for people to care about data. Everyone cares about data today.” Episode Transcript Brian: I’m really excited today for this episode. We have Julien Benatar on the show and he’s from a company that I’m sure a lot of people here know. You probably have had headphones on at your desk, at home, or wherever you are listening to Pandora for music. Julien , correct me if I’m wrong, you were the product manager for artist tools and insights at Next Big Sound, which is a type of data product that provides information on music listening stats to, I assume, artists’ labels as well to help them understand where their fans are and social media engagement. I love this topic. I’m also a musician, I have a profile on Next Big Sound and I feel music’s a fun way to talk about analytics and design as well because everybody can relate to the content and the domain. Welcome to the show. Did I get all that correct? Julien: Yeah, it was perfect. Brian: Cool. Tell us a little about your background. You’re from France originally? Julien: Yes, exactly. I grew up next to Paris, in Versailles more specifically, and moved to New York in 2014 to join Next Big Sound. Brian: Cool, nice. You’ve been there for about four years, something like that. You have a software engineering background and then now you’re on the product side, is that right? Julien: Exactly yes. I joined the company back when we were a startup. Software engineering was perfect, there was so much to do. To our move to Pandora, I moved to a product manager role around a year ago. Brian: Next Big Sound was independent and then they were acquired by Pandora. I assume there is good stuff about your data. Why did Pandora acquire you and how did they see you guys improving their service? Julien: We got acquired in 2015. The thing is, Next Big Sound was already really involved in the music industry. We already had clients like the three major labels and a lot of artists were using us to get access to their social data. I think it was a very natural move for Pandora as they wanted to get closer to creators and provide better analytics tools. Brian: For people that aren’t on the service, I always like to know who are the actual end users, the people logging in, not necessarily the management, but who sits down and what are some of the things that they would do? Who would log in to Next Big Sound and why? Julien: Honestly, it’s really anyone having any involvement into the music industry, so that can be an artist, obviously, try looking to try their socials and their audience on Pandora. But you can also be a booker trying to book artists in their town. We have a product that can really be used by many different user personas. But our core right now is really artists and labels, having contents on Pandora and trying to tell them the most compelling story about what they’re doing on the platform. Brian: When you think about designs, it’s hard to design and we talk about this on the mailing list sometimes but it’s really hard to design one great thing that’s perfect for everybody so usually you have to make some choices. Do you guys favor the artist, or the label, or as you call them,the bookers or whom I know as presenters,in the performing arts industry? Do you have a sweet spot, like you favor one of those in terms of experience? Julien: I think it’s something we’re moving towards, but it hasn’t always been this way. Like I told you, we used to be a startup or grow us to make a product that could work for as many people as possible. What is funny is we used to have an entity on Next Big Sound called Next Big Book where we used to provide the same type of service for the book industry. If anything, it’s been great to join Pandora because then we could really refocus on creators and it really allowed us to, I believe, create much better and more targeted analytics tools to really fulfill needs for specific people like artists and labels. Brian: I would assume individual artists are your biggest audience or is it really heavily used by the labels or who tends to… Julien: I think it’s pretty much the same honestly. I think the great thing today is that, compared to when Next Big Sound started in 2009, we don’t need to make a point for people to care about data. Everyone cares about data today. I think that everyone has reasons to look at their dashboards and especially for a platform like Pandora with millions of users every month. Our goal is really just telling them a story about what does it mean to be spinning on the platform and the opportunities it opens. Brian: You talked about opportunities, do you have any stories about a particular artist or a label that may have learned something from your data and maybe they wrote to you or you found out like in an interview how they reacted like, “Hey, we changed our tool routing,” or, “Hey, we decided to focus on this area instead of that area.” Do you know anything about how it’s been put into use in the wild? Julien: Yeah, it’s used for so many different reasons. For the people who don’t use Pandora, something I really like about the platform is it’s really about quality. As you use Pandora, you have the opportunity to thumb up or thumb down songs and as you do, you’re going to get recommended more songs like the ones you like. It’s really about making sure that you get the best songs at all times. The reality then is that for artists, their top songs on Pandora can be pretty different than their top songs on other platforms because sometimes their friends are going to be just reacting more to some part of their catalog than another one. I’ve heard many times of artists changing their playlists in looking at which songs where their fans thumbing up the most on Pandora. Brian: Could you go through that again? How would they adjust their playlist? Julien: Usually, people use Pandora as a radio service. While we already have internet today, most people are listening to the radio because they’re usually are very targeted and it just works really well. The way it works is you can thumb up or thumb down songs. If you thumb up a song, you’re giving us a signal that this is something that you like and something you want to listen to more. That’s data that we give back to artists. We tell them, “This are your most thumbed songs on Pandora. These are the songs that people engage with the most on the platform.” Looking at this data, you can actually inform them songs that they believe they should be playing more on the store. Brian: I see. A lot of it has to do with the favoriting aspect to give them idea what’s resonating with their audiences. Julien: Qualitative feedback, yes. Brian: Got it. Actually, it’s funny you mentioned the qualitative feedback. In preparation for this, I was reading an article that you guys put out back in March about a new feature called weekly performance insights, which is really cool and this actually reminds me of something that I talked about in the Designing for Analytics mailing list, which is the act of providing qualitative guides with your analytics. A lot of times they analyze for turnout quantitative data and whenever there’s an opportunity to put stuff into context or provide qualifiers, I think that’s a really good thing and you guys look like you’ve have done some really nice things here. I’ll paraphrase it and then you can jump in and maybe give us some backstory on it. One of the things that I think is really cool is there’re concepts of normalcy in here so that, if I’m an artist and I look at my numbers, I have an idea. For your Twitter mentions, for example, you say, “For artists with 26,000 followers, we expect you to get around 44 mentions.” When you show me that I have 146 mentions, I can tell that I’m substantially higher than what my social group would be. I think that’s a really fantastic concept that people not in music could try to apply as well which is, are there normalcy bans where you’d want to sit? Is there some other type of group, maybe, an industry, or apparent group, or another business unit, whatever it may be to provide some context for what these out of the blue numbers mean that don’t have any context? How did you guys come up with that and can you tell us a bit about the design process of going from maybe just showing, “You’re at 826 apples,” as compared to what? How did you move from just a number into this these kind of logical groupings where you provide the comparisons? Julien: I think what’s really fascinating is, we really live in an age of data. As an artist, you need to be on social media for the most part. There still a lot of artists I listen to but just decide not to. It’s part of things but at the same time, real big success in the music industry didn’t change. It’s still being on the Billboard chart, getting a Grammy and all these things. But as we see this, we have millions of artists looking at their data every day and just are not able to understand, like is it good or is it not good. Everyone starts at zero. We have a strong belief that data can only be useful when put in context. Looking at the number on its own can give you a sense of how things are doing but that can also be dismissive. An example is, a very common way to look at data is to look at a number and look at the percent changing comparison to the previous week. You’ve got a bunch of tables and you look at, am I growing or am I not growing. The reality is it’s actually impossible to always have a positive percent change. There’s no artist in the world that always does better week by week. Even Beyonce, I can assure you that the week she released Lemonade, she had more engagement on Twitter than the week after. With that in mind, we really try to give a way for artists to understand how are they doing for who they are and where they are currently in their career. Next Big Sound started in 2009. One of our goals was to basically check every artist in the world and give them access to these tools and by checking millions of artists, it allows us to do some very good and very specific benchmarks. For an artist, like the example you said, for instance an artist with a thousand Twitter mentions in a week, is it good or bad in comparison to their audience size? This feature comes because that’s just the question we’re asked. Artists want to know is it any good? What does this number actually mean for me? That’s why we really wanted to, in some ways, get out of being a content aggregator platform and really be a data analytics platform. How can we actually give information that can help artist make better decisions? Brian: I remember the first time I got what I would call an anomaly detection email from your service and it was about some spike in YouTube views or something like that. I thought it’s fantastic in two reasons. First of all, you identify an anomalous change and I think in this case it’s a positive anomalous change. That tells me that I should log in the tool. Secondly, you proactively delivered that to me. On the Designing for Analytics mailing list, we talk about is that user experience does not necessarily live inside your web browser interface or your hard client or whatever you’re using to show your analytics. Email and notifications are a big part of that. Can you tell me about how you guys also arrived at when you pushed these things out and maybe talk about this little anomaly detection service that you have? Julien: It all started when we got acquired by Pandora. We decided to just invite a bunch of users and just talk to them, understand how to use our product and what did they think about it. We had artists, managers, and label people come over and we just talk to them and basically they all said, “We love it.” But then, by looking at their actual usage, they don’t use it that much. I guess one of their questions was when should I be looking at my data? Everyone is very busy. As you’re an artist, you need to perform, you need to write music, you need to engage with your fans and same goes with everyone. When should I look at data? The reality is by being a data company, we do get all the data, we have all the numbers. We have ways to know when things are supposed to be known, when artists should be acting on something. We just turn this into this email notifications. Anytime we notice that an artist is doing better than expected, we just let them know right away. Brian: That’s great. Do you do it on the opposite end too? If there’s an unexpected drop or maybe like, “Oh, you put a new track out and your socials dropped,” or something like that, do you look at the negative side too or do you tend to only promote the positive changes? Julien: As far as pushes, we decided to only do push for positive. But as you mentioned weekly performance, weekly performance can give you some negative insights, like, “You’re not doing as well as artists with the same size of audience as yours.” The reason we didn’t do it for our notification is, anomalies are really hard to completely control. A reason, for instance, is Twitter removing bots. Basically, every single artist would have had an email telling them, “You lost Twitter followers this week.” It was a lot of work to really tune our anomaly factor to actually only send emails when something legitimate happens. That’s the reason we only decided so far to do it for positive but we actually have been thinking about doing the same for negative but that’s another type of work. Brian: Yeah, you’re right. You have to mature these things over time. You don’t want to be a noise generator. Julien: Exactly. Brian: Too many, then people start to ignore you. I’ve seen that with other data products I’ve worked on which just have really dumb alerting mechanisms that are very binary or they’re set at a hard threshold and just shootout noise and people just tune it out. Julien: I’m glad you mentioned this because this feature was in beta for a year for that specific reason. Brian: Got it. Julien: We had to learn the hard way. We had like a hundred beta users. We’ve got way too many emails because anytime there were an anomaly anywhere, they would just get an email. For the most part, it was things that were supposed to help them. If a notification becomes noise, then that’s absolutely against its purpose. Brian: I don’t know if everybody knows how the music business works, at least from the popular music side, but just to summarize. You have individual artists that are actually performers. They may or may not have an artist manager which takes care of their business affairs, represents them like negotiations with people that book shows. Then you have labels which are sort of like an artist manager except they’re really focused on the recording assets that the artist makes and they actually tend to own the recordings outright at the beginning and then over time, the artist may recoup through sales they make it the ownership act and the sound recordings they make. Of those kinds of three major groups, is there a one that’s particularly hungry or you’re the squeaky wheel that is most interested in what you’re doing? Julien: I really think that into these three groups, we have a subset of users that are really into the data and into the actionability of it. I don’t think it’s one specific group of user. It could be all around the industry like we have the data-savvy, they really want to know. We have some users that actually would rather get more notifications even if they need to on their end to figure what is right from what is wrong. But since we have such a wide user base of different type of people, we decided to go on the conservative side and make sure to only share things that we thoroughly validated through all of our filters. Brian: I assume that your group reports into some division of Pandora, I’m not sure of that. Are you reporting into a technology, like an IT, or a business unit, or marketing? Where do you guys fit in the Pandora world? Julien: We’re part of the creator’s tools. I don’t really have a perfect answer to this. Brian: Okay. I guess my main question being, because when we talk about designing services, we talk about both user experience, which is the end user thing and about business success or organization success. I’m curious, how does Pandora measure that Next Big Sound as delivering value? I can understand, I’m sure our artist can understand how the artists value it through understanding how is my music moving my audiences, et cetera. Is there a way that Pandora looks at it? Are they interested in just time spent? The analytics on the analytics, so to speak, is what I’m asking about. How do you guys look at it like, “Hey, this is really doing a good job,” or whatever? Do you know how that’s looked at? Julien: To be honest, I think you said it right. Our goal is to help artists make their decisions through data and having artists use the platform is currently the way Pandora sees us doing a good job. Actually, it hasn’t changed that much since our acquisition. One of our main KPI for the past and couple of years is something I would call insights consumes. Just making sure that our users, artists, anyone using Next Big Sound are consuming data. That can be them logging into the website or that can be them opening one of our notifications. But so far that was our main KPI. We’re trying to work on some more targeted KPI, potentially like actions taken, that would be the North Star, but we’re still working on how to do that right. Brian: Do you guys facilitate actions, so to speak, directly in the tool or are there things people can do with those actions really take place outside of the context of Next Big Sound? Julien: There are actions that artists can take to the other creator’s tools provided by Pandora. For instance, artists have the ability to send audio messages to anyone listening to them. If they go on tour into the US, they can have targeted messages in every single song they’re going to play. If anyone listens to them there, they can just click and buy a ticket. We’re working to make sure that artists are aware of these tools because they are free and they’re generally helping them grow at their careers. But regarding external actions, so far we don’t have any one-click way to tweet at the right time to the right people or with the right content or anything like this. Brian: Sure and that’s understood. Not every analytics product is going to have a direct actionable insight that comes right out of it. You guys may be feeling a longer term picture about trending and maybe for a certain artist to get an idea if they’re releasing music fairly frequently, what stuff is working and resonating, and what stuff is not. I can understand that. There may not be a button to click as a result immediately. Julien: That’s the goal though. Everything we do right now is going towards this objective. Maybe I can tell you a little about the way we think about data and that can give more sense to it. In order to work on any new feature, we follow this concept called the data pyramid. It’s something that you can Google. There’s a Wikipedia page for it. Let me explain to you how it works. The data pyramid, it’s a pyramid formed of four layers. It could be upon each other and each representing an exquisitely useful application of data. At the bottom of the pyramid we have the data layer. Any sort of data that we may have. For our case, Android data, Twitter, Facebook just getting the numbers, getting the raw data. On top of it, we have the information layer. The information layer is going to be ways you have to visualize this data. I guess it’s like the very broad sense of analytics. We’re going to give you tables, graphs, pie charts, you name it. We’re giving you ways to craft stories about this data but it’s on you to figure it out. Then on top of it we have what we call the knowledge layer. That’s where things start to get interesting. The knowledge layer is the contextual part of it. It’s like, “What do this number actually mean?” It has industry expertise. For instance, the way we’re going to work about it for musicians and their true data may be different than any other industry. The knowledge layer goes like a weekly performance. It’s a perfect answer to it. It’s what does it mean for me as a musician with a hundred fans to get two mentions this week. Same for notifications. It’s telling you that you should be looking at your data right now because something is happening. That’s how we get to the North Star and the last part of the data pyramid which is intelligence. The goal of intelligence is actionability. Now that I get to understand what does this number mean to the specific context, what should I be doing? Following your question, everything we’re trying to do here is to get to a point where we can just send an email to an artist and tell them, “Hey, you should be doing this right now because, with all the data that we have, we believe that this is going to have the highest impact for you.” Brian: It‘s really fascinating that you just outlined this data pyramid. I actually haven’t heard of this before. It made me think of one of the kind of, it’s not a joke but in the music community, I’m also a composer and when we write stuff, the kind of running joke is like nothing is new. Your ideas for this new song or this new melody I’m composing, it probably came before you. You heard it there before. I wrote a post on my list that was pretty much exactly the same thing except the knowledge layer. I was calling that insight. Data have been this raw format and information being the first human-readable format that’s like say going from raw data to a chart, a histogram. Now I have a line on a chart and then the insight layer being, I have a line on the chart and another line comparing it to like you said, average, or my social group, or a parent group, or some taxonomy, or an index. Then the action or the prescription for what to do or the prediction those that kind of lead you in about action which would be that fourth state. You’re like, “Oh, is this really a new concept?” It’s like, “Nope. Someone else already thought of that.” I totally want to go read about this data pyramid. Julien: That’s amazing. Brian: I’ll find that link to the data pyramid and I’ll put that in the show notes for sure. I thought that was really funny. Julien: It’s funny that you called it insight because that’s the way we call a lot of our features are working out. The way we define insight is bite-size, noteworthy, sharable content. How can we get into the noise of all of the data that only gives you exactly what you should be looking at. That’s how we got into notification and weekly performances. This is the one thing you should be looking at. Brian: I understand what you’re getting at there. The insights are, like you said, bite-size chunks of interesting stats that someone can put some kind of context around. That’s great and it’s good. One of the things I liked, too, that you talked about was you said, “Oh we got like a hundred users, like a beta group and that kind of inspired some of this.” Your product response to how do we help people know when to come and look at our service. I think this is really good because one of the problems that I see with clients and people on the list, I think is low engagement. This is especially true for internal analytics companies. Low engagement can be a symptom of a difficult product, it doesn’t provide the right information at the right time, it may not have a lot of utility, or it’s a resistance to change. People have done something the old way and they don’t want to do it the new way. One of the recipes you can follow if you’re trying to do a redesign or increase engagement is to involve the people that are going to use the service in the design process, both the stakeholders as well as the end customers. This is especially true again for the internal analytics people. Your customers or other employees and your colleagues. By engaging them in the design process, they’re much more likely to want to change whatever they’re doing now. I loved how you guys did some research. Now I want to ask, do you frequently do either usability testing or interviews? Is that an ongoing thing at your company or is it really just in front of a big feature release or something like that? How do you guys do this research? Can you tell me about that? Julien: Of course. It’s consent. We haven’t released any major feature without doing some heavy user testing. I’m very lucky to be working with two designers, Justin and Anabelle who are very user-focused. Honestly, if you come to our office, at least every week we’re going to have some user interview and just talking to them, showing them prototypes, and just see how do they play with it. Brian: So you’re doing a lot of testing it sounds like. That’s fantastic. Julien: At the same time it’s always to find the right balance because you could be overtesting things too. We really are focusing on user testing for new things and make sure that the future that we are working on actually answers their user story that we intended. Brian: I don’t know how involved you get participating in these, but do you have any interesting stories or anecdotes that you got from one of those that you could share? Julien: Let me think. I do participate into a lot of them but I’m not sure I have an example right now. Brian: Are most of the people you interview, are they current users of Next Big Sound or do you tend to focus on maybe artists that haven’t experienced the service yet or you mix it up? Julien: We mix it up. We mostly engage with users that we already have but then we can decide to go with users that haven’t used the platform for a while, or more active users if you want to understand how we’re useful into their day to day. What I would say is that, surprisingly, it’s very easy to get users to chat about their experience with the product. I didn’t assume that we would get so many responses when we tried to have people come over or just hop on the zoom to check a new feature. Brian: I’m glad you actually mentioned that because I think in some places, recruiting is perceived to be difficult and it probably isn’t. Maybe you haven’t done it before but as I tell a lot of my clients, a lot of people love to have someone listen to them talk, tell them all about their life and what’s wrong with it, and how it could be better with their tools. They love having someone listen to them and especially if they know that their feedback is going to influence a tool or a service that they’re using. They tend to be pretty engaged with it. I find it’s really rare that I do an interview with a client’s customer and they don’t want to be included in the future round like, “Hey, when we redesign the service, can we come back to you and show you what we’ve done?” “Oh, I love to do that!” Everybody wants to get engaged with it. There are places where recruiting can be difficult when it’s hard to access the users, some of the enterprise software space that can be an issue sometimes. But generally, if you can get access to them, they tend to be pretty willing to participate. I’m glad you mentioned that. Julien: I think the great part about testing with current users on the platform is to actually show them prototypes with real data, not just show them an abstract idea that we want to work on. As soon as they can see what we’re working on apply to their own career as musicians, for instance, that can lead to fascinating discussions. Brian: You made a really good point on the real data thing. I remember as far back as 10 years ago or whenever, I use to work at Fidelity Investments, we would see this issue when we’re working on the retail site for investors. When you show a portfolio that, for example, has Apple stock trading at $22 in it, you’re not really there to test what is the price of Apple stock but you might be testing something entirely different and the customer cannot bear what is going on? They’re so stuck on this thing. It’s all fake seed data in the prototype. The story here being if you’re a listener, when you test it’s important to have at least realistic data. You don’t want to have noise in the test or whatever your studying or else you can end up on this tangent. Try to make the numbers looks somewhat realistic if you’re using quantitative data. In some cases, people can be taught to roleplay. Pretend you’re Drake or pretend you’re some big artist and then they can get their head around why they have billions of streams instead of thousands which they’re used to. Julien: Absolutely. That also helps us just build better products because the reality is we have a lot of artists with maybe 10 plays in a month. As we build visualizations like something that we built a line of looking at Drake’s data, it’s not going to work as intended for a smaller artist sometimes. Having real data involved as soon as possible into the design process has been such a game changer for us. We really have a multidisciplinary team involved into the research and design of everything we do. I’m working with a data scientist, data engineer, a web engineer, and designer on a daily basis. Obviously, we all have our things to do. But as we get into creating something new, we just make sure to have someone helping us get the real data, interview the right user, and just create prototypes as soon as possible. Working with prototypes is essential into building useful data analytics tools. Brian: Yes, you do learn a lot more with a working prototype. It’s not to say you can’t test with lower fidelity goods, especially early on but for a service like yours when the range of possible use both the personas and also you’ve got the Drakes of the world, big major label artist and then down to really small independents, it’s really important to have an idea how your charts are going to scale, and what’s going to happen with data. Even just small stuff like how many decimal points should you be showing on a mobile device, some of the numbers might cram up. Julien: Exactly. Brian: All this stuff that you never think, if you only look at one version of everything, you can end up with a mess. I’m glad that you brought that up. Julien: I couldn’t say better. The decimal is actually something that we’ve had to discover through real data. Brian: To all of you in the technical people out there, I will say this. If I’ve seen one trend with engineers, is they love precision and there’s a lot of times when there’s very unnecessary precision being added to numbers. Such as charts and histograms. Histograms are usually about the trend, they’re not about identifying what was the precise value on this date at this time. It’s about the change over time. Showing what’s my portfolio worth down to three digits of micro-cents or something like that is just unnecessary detail. You can probably just round up to the dollar or even hundreds of dollars or even thousands of dollars in some cases. It actually is worse. The reason it’s worse is that adds unnecessary noise to the interface, you’re providing all these inks that someone has to mentally process, and it’s actually not really meaningful ink because the change is what’s important. Think about precision when you’re printing values. Julien: This concept of noise is so essential today for any data analytics tools. There is so much data today. There is data for everything. I think it’s our responsibility as a data analytics company to make sure what are we actually trying to help our user with this data set is not just about adding new metrics. Adding new metrics usually is just going to add noise and not be helpful in comparison to fairing what do they need to make the right decision. Brian: Right. Complexity obviously goes up. The single verb, ‘add,’ as soon as you do that, you’re generally adding complexity. One of the design tools that is not used a lot, and this is something I try to help clients with is, what can we take away? If we’re not going to cut it out entirely, can we move this feature, maybe this comparison to a different level of detail? Maybe it’s hidden behind a button click, or it’s not the default. But removing some stuff is a way to obviously simplify as well, especially if you do need to add new things. Your only weapon is not the pencil, you’ve got the eraser as well in the battle so to speak. Julien: I couldn’t agree more. On Next Big Sound we have this concept of artist stages. It’s a way for us to put artist into buckets and by looking at their social instrument data. It goes from undiscovered to epic. We do that by looking at all of the data we have and looking at it in context. I don’t have the numbers right now because they update on a daily basis but every artist starts undiscovered. For instance, as they get 1000 Facebook likes, maybe they’re going to get to a promising stage. We have all of these thresholds moving everyday looking at trends among social services. But what is interesting is that for instance, for a booker, a booker doesn’t need to look at the exact number of Twitter followers for an artist. He needs to know that he’s booking for a midsized venue in the city he’s in and he’s probably going to be looking for promising to established artists and not looking for the mainstream to epic artists. It’s always about figuring a way to use the numbers to tell the story. Brian: I’m totally selfishly asking for myself here, but I was immediately curious. I live in Cambridge which is in the Boston area, and I am curious who are the big artists in our area and what is the concentration? I’m in a niche. I’m more in the performing arts market, in the jazz, in world music, and classical music but I’m just curious. Is there a way to look at it by the city and know what your artist community looks like? You guys do anything like that? Julien: We don’t currently. But I think YouTube has actually a C-level chart available. It’s not part of something we do because I think the users it would benefit are not the users we specifically try to work on new features. It’s more something for bookers than artists ,specifically ,but it’s exactly the type of thing that we need to think about when we prioritize new features. Brian: I’m curious just because the topic’s fairly hot. Everybody is trying to do machine learning projects these days. I don’t like the term AI because it tends to be a little bit overloaded but are you guys using machine learning to accomplish any particular problems or add any new value to your service right now? Is that on your horizon? Julien: How do you think about machine learning? Brian: A lot of times I associate it with predictive analytics or understanding where you might be running instead of just using statistics. I don’t know what kind of data you might have for your learning that you can feed in but maybe there’s aspects about artists that can predict. Especially, I would think like in the pop music world where there tends to be more commercialization of the music, I would say, where it’s like we need a two-minute dance track at this tempo specifically because DJs are going to play it. It’s a very commercial thing. It’s very different than what I’m used to. So I’m curious if there’s a way to predict out how an artist may do or what kinds of tracks are performing well. Like these tempo songs, we predict over the next six months that tech house music at 160 beats for a minute is going to do really well based on the trending. I don’t know. I’m throwing stuff out there. The goal, obviously, is not to try to use like, “Oh Home Depot has this new hammer, let’s run out and get it. We don’t even know what it’s for but everyone else is buying it.” That’s how I joke about machine learning. It’s like you need to have a problem that necessitates that particular tool. I don’t ask such that, “Oh there should be some.” I’m more curious as to whether or not it’s a tool that you guys are leveraging at this time. Julien: The Next Big Sound team doesn’t worked on features following the musical aspects of things. We really are focused on the user data. Brian: Engagement and social. Julien: Engagement data mostly, yes. But at the same time, I’m sure teams have worked on this because of the way that genome works. We have a lot of data about the way songs are made. Regarding machine learning, on the Next Big Song team, we actually have something that is called the prediction chart. You said predictions. We have this chart that is available every week. Basically, it really goes back to having data for a long time. The fact that we’ve had data since 2009, we’ve been able to see artists actually get from starting to charting on the Billboard 200. By having all of these data, we’ve been able to see some trends, some things that usually happen for artists at specific times in their career up until they get into the Billboard 200. We actually do have some algorithms that allow us to apply this learning to all of the artists on Next Big Sound right now and have a list every week of artist that we believe are most likely to appear on the Billboard 200 chart next year. Brian: I see. Got it. Do you track your accuracy rate on that internally and change it over time? Do you adjust the model? Julien: Yeah, we do. Brian: Cool That’s really neat. Tell me, this chat has been super fun. I’ve selfishly got a little indulgent because being a musician, it’s fun to talk about these two worlds that I’m really passionate about so I could go on forever with you about this. But I’m curious. Do you have any advice for other product managers or analytics practitioners about how to design good data products and services? How to make either your own organization happy or your customers happy? Do you have any advice to them? Julien: Yeah, of course. I guess it’s all about asking questions, honestly. What is very good with working at Next Big Sound is that it all started in 2009. Maybe actually I can go back and tell you the story about how it started and why it’s so different today. It started in 2009. It was actually a project, a university project by the three co-founders. Basically, they were wondering about one thing. How many plays does a major artist get on the biggest music platform in the world? At that time, it was MySpace. The artist they picked was Akon. Basically, they just built a crawler, went to bed, woke up, and discovered that an artist like Akon was getting 500,000 plays on MySpace in one night in 2009. The challenge in 2009 was to get the data. That’s why for the most part in Next Big Sound as it started was, I really think a data aggregation tool. Our goal was to get as many sources as possible and just make them easily accessible into the same place. We really are much into the information layer here. We’re giving you all the numbers and you can compare Tumblr to Vimeo, to YouTube, to Twitter, to Facebook, to Vine, to you name it into a table or a graph that you want to. The reality is, today things change. We don’t need to fight to get data anymore. We don’t need to hike our way into getting the numbers. Now, data is accessible to everyone in a very easy way. It’s kind of a contract. You, by being an artist, you know you’re going to get access to your Spotify, YouTube, Pandora, Apple Music or any other platform data very easily just by signing up and authenticating as an artist. That’s where our goal changes. Thankfully, we don’t need to convince people to care about data, we know they do already. But now the challenge is different. Now, the challenge is to make them understand what does their data mean and how can they turn it into getting even more data, getting into having even more engagement, and having even more plays. I think that’s something that is very interesting because it really resonates into the question we’ve been asked in the past few years like, “What does my data mean and when should I be looking at my data?” If anything, these two things correlated pretty well. People don’t just want to look at numbers anymore, they want to be able to use numbers to make decisions. That’s the core of what we’re trying to achieve today. We couldn’t be there if we didn’t have users that ask us the right questions. Brian: Cool that’s really insightful. Just to maybe tie it off at the end and maybe you can’t share this but what’s your home run? What is your holy grail look like? Is there a place you guys know you want to get? Maybe it’s the lack of data or you don’t have access to the data in order to provide that service. Do you guys have kind of a picture of where it is you want to take the service? Julien: What is very noble about our goal at Next Big Sound specifically is we’re here to help artists. The North Star would be to make sure that any artist at any time in their career is doing everything they can do to play more shows, to reach to more people, and to make sure their music is heard. Brian: Nice. I guess it’s like you’re already there, just maybe the level of quality and improving that experience over time, that’s your goal. It’s not so much that there’s so much unobtainable thing at this moment. Is that kind of how you see it? Julien: I think the more we don’t feel just a data analytics tool, the more we’re getting to that goal. I really hope we get to a point where people don’t need to be data analysts to look at data. We’re always going to provide a very customizable tool for the data-savvy because they know what they need more than we can ever do it for them. We want to make sure that for everyone else, we can just make it very easy and as simple as a click for them to do something that’s going to impact them positively. Brian: Cool, man. This has been really exciting to have you on the show. Julien, can you tell the listeners where can they find you on the interwebs? Are you on Twitter or LinkedIn? How do they find you? Julien: For sure. @julienbenatar on Twitter, nextbigsound.com is free for everyone. Actually, we made our data public recently, so if you ever want to learn more about what we do, please check it out. We try to post on our blog about what we learn through data science, through design, and share more about why we build what we build. I recommend to just check blog and do some commitment to learn more about what we do. Brian: I definitely recommend people check out the site. The fun thing is again, as you said, it’s public. If there’s a band you like or whatever, you can type in any group that you like to listen to and you can get access to those insights. Just kind of get a flavor of what the service does. I’ll put those links in the show notes as well as the data pyramid. Julien, cool. Thanks for coming on. Is there anything else do you like to add before we wrap it up? Julien: No, thank you so much. I love reading your newsletters and I’m very happy to be here. Brian: Cool. Thank you so much. Let’s do it again. Julien: Cool. Brian: Cool. Thank you. We hope you enjoyed this episode of Experiencing Data with Brian O’Neill. If you did enjoy it, please consider sharing it with #experiencingdata. To get future podcast updates or to subscribe to Brian’s mailing list where he shares his insights on designing valuable enterprise data products and applications, visit designingforanalytics.com/podcast.

Jason Krantz is the Director of Business Analytics & Insights for the 135-year old company, Weil McLain and Marley Engineered Products. While the company is responsible for helping keeping homes and businesses warm, Jason is responsible for the creation and growth of analytical capabilities at Weil McLain, and was recognized in 2017 as a “Top 40 Under 40” in the HVAC industry. I'm not surprised given his posts on LinkedIn; Jason seems very focused on satisfying his internal customers and ensuring that there is practical business value anchoring their analytics initiatives. We talked about: How Jason’s team keeps their data accessible and relevant to the issue they need to solve for their customer. How Jason strives to keep the information simple and clean for the customer. How does Jason help drive analytics in a company culture with a lot of legacy (from its people to its parts) The importance of focusing on context How Jason drives his team to be business partners, and not report generators Resources and Links: Jason Krantz on LinkedIn Quotes from Jason Krantz: "You realize that small quick wins are very effective because, at its core, it’s really important to get executive buy-in." "I’m a huge fan of simplicity. As analytics pros, we could very easily make very complex, very intricate models, and just, 'Oh, look at how smart we are.' It doesn’t help our customers. …we only use about two or three different visual types and we use mostly the exact same visual set-up. I can train a sales rep for probably five minutes on all of our reporting because if you understand one, you’re going to understand everything. That gets to the theme again of just simplicity. Don’t over complicate, keep it simple, keep it clean.” "…To get buy-in, you really got to have your business case, even to your internal customers, really dialed in. If you just bring them a bunch of crap, that’s how you’re going to lose credibility. They’re going to be like, “I don’t have the time to waste with you,” even though we’re trying to be helpful.” "What my team and I do is we really help companies weaponize their data assets." Episode Transcript Brian: Jason, are you there? Jason: I’m here my friend. Brian: Sweet. How’s it going? Jason: It’s going very well today. How’s your Friday going? Brian: I’m doing awesome. We’re going to talk a little bit about analytics. Is it Wile McLain or Weil McLain? Jason: I say Weil McLain. If I’ve been saying it wrong, I’ve been saying it wrong for a while. Brian: As I recall from my musical training, I think in German, the second syllable is the one that says its name. I guess it would be Wile McLain, like if it was W-I-E-L it would be ‘Weil.’ But I don’t know. Its anglicized as they come over the pond. Jason: I’m going to go with you on that when you sound like an expert. Brian: Nice. Well, you sound like an expert in analytics at Weil McLain. Tell us about what you’re doing over there. We met on LinkedIn, I’ve been enjoying your postings on the social feed about your approach. You seem really passionate about what you’re doing and I’m like, “I don’t know who this guy is, but that was really interesting.” I just have. Tell us about the company, what they do. I know they’re in heating, right? Jason: Yes, absolutely. The company I work for, and I work in the HVAC space, we’re a 135-year-old boiler manufacturer. Whether you realize it or not, you probably have one of our products in your house or building or very close to where you live. What my team and I do is we really help companies weaponize their data assets. As you know, a lot of companies are very skilled at acquiring data since the Big Data Movement. But the reality is that a lot of these companies don’t know what to do with all this data. That’s where we really come in. What I always tell my team and our business partners that we work with internally and externally is that our focus is on solving business problems. In order to do that, you have to identify what is the business problem that you’re trying to solve or strategic agenda that you’re trying to address. In order to do that, you really have to be anchored in the biz. Again, that’s just my perspective, but if you’re in the business day in, day out, you develop this very keen stand of what the business would need to accomplish its objectives. Just like right now, we are based in the marketing group and it’s a great spot to be. I’m a firm believer that every analytics team should be based in the business for a reason that I just talked about. But what that does being business-first is that gives us a great lens to look at data from. Sometimes analytics people would be IT-centric and they can do a lot of academic work against the data set or different data sets. But the business might look at the output and be like, “Yeah, that doesn’t help us.” We always, always, always start with, “What is the business problem we’re trying to solve or strategy we’re looking to address?” It also helps us when it comes to curating data also. That’s one of our primary response [00:03:21] this too, is to look for different data sets both internal and external that can help us identify strategic opportunities. It sounds really unsexy, I’m not going to lie. I think some of my LinkedIn post just say that data is boring. It really is. It’s mind-numbing, too, about 85% of my customers. But that’s the important part is understanding what do our customers need and that’s really the lens that we look at this through. We are a service provider, our customers are internal and external, we have customers just like any other business. We have to take this really boring, but really potent product in data and make it accessible to them. That’s really where we use design to really try to make that magic happen. Brian: I love that you said, “Trying to understand what the problem is.” This is something we talk about on the mailing list quite a bit. In fact, falling in love with the problem is a good basis for doing good work instead of kind of jumping to solutions or feeling […]. As I tell my clients sometimes like, “Our job is not to go and visualize the data. It’s not […] available for someone to put into another tool or whatever the heck it is. The job is to find an insight that already is used. Probably they’re already in your job and you’re there to make […] if you’re doing internal analytics. Help them do a better job at what they’re doing, offer more value. You need to figure out how to work that into their life.” For example, for you guys then, your customer, I assume is it primarily sales people that you’re working with? Who are your customers and your […]? Jason: Yes. Great question. One of our biggest customers is sales. Sales has been one of my biggest customers for the past 10 years of my career. I’m very intimately involved with the sales team, sales operation, sales optimization, insight gathering, pricing, things like that, but also marketing. We do a lot in terms of competitive intelligence gathering, market research. We also do a lot of operations in finance obviously related to the prices, that sort of thing. We really touch all areas of the business, but without question, our biggest customers are going to be sales and marketing. Brian: If you were to bring a new initiative like, “Hey, we have access to…” I don’t know what it might be but for you maybe your point, [might be a line 00:05:49] of data that could actually give them more leverage. We know what the negotiation brings, better than […], we know we kind of have an idea now from what the industry is doing for their sales such that we can now tell the CRM like, “This is your […] or something.” When do you get that sales person involved? Do you deliver a solution and get feedback? Do you bring [...] early and say, “Hey, we think we can tell you more about how to do better pricing on the spot with this thing.” Do you bring them in or when do they fit into your process? Jason: Great question. A lot of times because we spend so much time actually in the trenches, that’s one of things I think is unique about the way that I design my teams to do analytics. It’s not like hand off product and we’re like, “Godspeed. Good luck.” Once we deliver a solution, we’re actually in the trenches with the business trying to implement what we’re talking about because it just works better. The team work is just more effective and they know that they’ve got back up, they know they’ve got air support. Really, a lot of times when we come up with something new, a lot of times we will frame it from the lens like, “Hey, we know that we’ve got opportunity A or issue B, or whatever it is. This has been an issue or an opportunity for months or years or whatever.” We think that we’ve identified something that could help us in solving that issue or realizing the potential of that opportunity and then it becomes, “Okay, let’s sit down and talk about, do you agree that this might actually help us in this process?” Because the one thing that I’ve learned is, in order to get buy-in, you really, really got to have your business case, even to your internal customers, really dialed in. If you just bring them a bunch of crap, that’s how you’re going to lose credibility. They’re going to be like, “I don’t have the time to waste with you,” even though we’re trying to be helpful. What we found out is if you really dial in what are we trying to address with this, just as you would with any business case, and you bring that to them, I have found that they tend to be much more receptive. It’s not to say there’s not going to be resistance—resistance comes with any change—but we found that typically framing it from that lens and saying, “We’re trying to solve a problem that you have, we think that this data will help,” that’s a great starting point. Brian: Do you have an example of a before/after with that? I don’t want you to get into proprietary stuff you can’t talk about but is there like a, “Before they did it this way,” and then we brought them in and said, “Hey, we think we can get […].” and how you went [00:08:19]. Jason: Yeah. What I can talk about is just the manner in which we distribute sales information, specifically insights. I think that, for your listeners, this is going to ring true to a lot of sales forces. I know for all them that I’ve been in or worked with, this case was true 100% of the time. But one of the things that, again, keeping the customer-centric focus, that if you look at your sales reps, a lot of time is you’re going to be what I call casual data consumers. By that, I mean that these are guys and gals that aren’t really into data day in and day out like guys like you and I or some of the listeners maybe. What we have to do is, as I always encourage my team to take empathetic lens and look at, “Okay, if we give them what our first […] is going to look like, how are they going to interpret this?” A lot of times, to be honest, it’s not very good. Now that’s where we have to look at internally and kind of rationalize and say, “Okay, let’s find this. One of us will find [00:09:14].” But one example of that is traditionally, sales reps and sales teams will get the information in a flat Excel table. Just lots of rows and columns and just gibberish everywhere. That’s a very financial-centric view of sales data. But the reality is—I don’t know about the rest of mankind but I know for myself—I can’t remember much more than 10 numbers. The mental computational cost of extracting insights is just gargantuan. What happens is, I just don’t even bother to do it. I’m just like, “Yeah, whatever.” An equivalent of that is, you know if you get a big block of text in email? Even though if you took that same block of text and broke it up into two paragraphs or two sentence segments which is very easy to read when you put the effort in, but for me, if I get a big block of text, I’m not even going to read that. It’s kind of one of the same things that we see on the sales side. What we do is just say, “You know what? There’s a lot of really good information here and we need to make it digestible for our customers.” That’s where we found traditionally, visualization can be an incredibly effective tool to communicate insights to this casual data audience, to this casual data consumer. Brian: Do you have to work through the visuals with them? Do they tend to get it the first time? Is it a process of you share, “Here’s a report or here’s some new view on X.” How do you know if the visualization is actually allowing them to pull the insight out of what other [00:10:46] broad data? How do you know they’re actually “getting it”? Jason: That’s a great question. I’m a huge fan of simplicity. As analytics pros, we could very easily make very complex, very intricate models, and just, “Oh, look at how smart we are.” It doesn’t help our customers. It doesn’t help anything. Really what we do—this is going to get to the theme of simplicity—is we only use about two or three different visual types and we use mostly the exact same visual set-up. Just to kind of frame it, what I’m a big fan of is a simple bar chart. There’s more details attached to it but to the right of the bar chart, we’ll typically put a tabular data set. What we do is, as you think in US at least, we start in that left-hand side of the page or we […]. What we do is we look at the visual real estate. We say, “Our customers are going to start in the left-hand side. We want them to look at the bar chart because it allows them to very rapidly assimilate it at a high-level what’s going on.” It’s great at communicating at top-level churn very quickly but the trade-off is, is this horrible imprecision. You have no precision at all. What we like to do is then we address that issue by putting a simple table, very clean, very simple table over to the right. What that does is that then provides the precision that the customers are seeing in most financial-centric tables. What we found that does is that we have to train our sales team on one set-up and then that set-up is used virtually universally on all of our solutions. As an example, I can train a sales rep for probably five minutes on all of our reporting because if you understand one, you’re going to understand everything. That gets to the theme again of just simplicity. Don’t over complicate, keep it simple, keep it clean. Brian: I think those are good. A lot of times, when I work with engineering clients, they fall in love with consistency. I guess one point to maybe just the contrary of this is that, I think consistency is generally a good rule with design. We want to minimize unnecessary change but at the same time, I would recommend to listeners is to always look at context first, and context should always come in. Let’s say Jason comes up with report number 12 and they have 11 now or whatever, and it doesn’t feel right for number 11. That’s a place where a designer would probably push for, “Well, no. The 12th one actually needs to be different because it’s not […] 11th and even though it’s not consistent, in this context, we don’t need it to win. This version will deliver the usability and the utility that we’re looking for better than the other 11 will.” In general, I think it’s smart to not get creative unnecessarily with meaningless ink on the screen like, “Let’s try it this way. Let’s change the color palette. I’m tired of this.” Those are not good reasons for […], you’re just introducing noise and it’s unnecessary. But I like that you guys are thinking about simplicity and trying to reuse templates and not looking at it as a creative tableau. Ironically, people think it’s a creative “design” tool, but at the same time with all those weapons, you have a lot of different weapons you can use in that toolkit and part of that is knowing how to use this. It’s the same thing with Photoshop, a million buttons and all this stuff. The Photoshop doesn’t make you a designer. It’s being aware of your customer’s pain and the problems they need and knowing when to use all those filters and all those different things that it can do. I like that you guys are looking into that simplicity and reusing templates when it’s meaningful to do so. Jason: You bring up some great points and I 100% agree. My team that’s listening there, they’ll laugh because I beat it in their heads, “Context. Context, context, context.” Both in design as you’ve talked but especially with numbers in general. Like, “If I give you a number, a billion, that doesn’t mean anything, you got to have context.” I’d say the same is true for design just as you articulated. Great point. Brian: Where does the impetus for “everybody is a data company, everybody wants to do analytics”? But then there’s operationalizing that, there’s getting buy-in, leadership behind it. Where does that come from in your org? Where is the interest in taking a 130-year-old company and getting it to care about this? Where does that come from, your influence and all of that? Jason: That was driven by our current president because he saw it as part of a digital transformation. Obviously, this was an essential component of that. Obviously, we do a lot with analytics, but we’re also involved in a lot of other digital components that lead to that overall digital maturation. Analytics is a very, very big part of what we do but it’s not all that we do. We serve as kind of that quarterback for a lot of the digital initiatives to help basically, guide them through the process. Because even though some of the nuances of each of this project, each one will have its own nuances, they all come back to data. Data is the currency. We found out pretty quickly that if you want to stay relevant in this day and age, you need to be digitally evolved but more importantly, as you look at it, do you [compare the 00:16:02] advantage that you can derive from analytics? I would argue that gap is slowly closing known certain industries like manufacturing, but we probably have a little bit more runway [00:16:10] it. But for a lot of industries, analytics is becoming table stakes. It’s one of those where you can certainly expect incremental value and competitive advantage, but the question becomes how much longer. That was kind of the impetus of saying, “Hey, we got to get this going sooner rather than later.” Brian: Do you have people in sales that are resistant to using the reporting or taking advantage of your information or is it pretty ingrained in the company culture that it’s like, “This is a tool. Why would you not want to use it?” Or did you guys have a […] getting adoption? Jason: Yeah. I would say anytime you’re going through a transformation of this magnitude, it’s hard and I would say especially for other manufacturers. I found in general, manufacturing in general, tends to be one of the laggards industry-wise in analytical maturity. Unquestionably, it’s tough for no other reason than change is tough. You’re taking legacy plants, legacy steer pieces, legacy process, and some people has been around the company for decades potentially, and we’re asking them to change almost on a dime on their time scale how they do business. It’s not that it’s right or wrong but what we try to point out is that, as I always say, we have to acknowledge the past. We’ve been where we’ve been, we’ve been successful at where we been. But there’s been more change in the past two or three years than maybe you’ve seen in the past 15-20 years. In order to stay relevant, you really have to be ready to evolve, not only evolve but evolve quickly. But I have to openly acknowledge that that’s hard. It’s a hard proposition for a lot of people. Again, it comes down to change management and managing not only expectations but supporting that change. Change doesn’t happen by itself, we have to support that. That’s really what we try to coach through. The way that we try to do that is by developing a product with our customers. I’m sure as you can […], if you force something upon somebody, it doesn’t get received too well. But if you develop it in conjunction with them and do tie it around their needs, it tends to get better adaptation. Brian: You used the word product in there and I’m interested, do you see the outputs of your efforts? Primarily, it’s BI reporting as I understand it. Do you look at that as the product that you offer to sales? Is that kind of how you see it? Jason: Yeah. We offer a product in the form of the insight packages but it’s also the service. Service that goes with it where again, we serve as essentially internal consultant to help them along. If you take just the product-centric approach, you just deliver an insight package and you’re like, “Good luck. It’s [00:19:35]. Have at it.” What we do is we deliver the product and then we partner with them and say, “Okay, here’s what we see. Now, remember you’re talking about this going on in the channel last year and our note show that there’s been a lot of competitive activity in this area. Here’s some of the question that we have. You’re the expert, so what do you think?” What we found is that working together like that, we tend to get pretty good results versus just leaving these guys on an island to kind of figure it out themselves because they virtually always know the answer but sometimes it’s up to us using these products and then offering the service is to ask question that maybe aren’t getting asked. A lot of times, we find out that they know the answer it’s just that you kind of have to ask the question. Brian: Is that often like, “I was using XYZ report. Could you break this down by county instead of just by whatever because I feel there’s more people living in the East side of town and the average is here or […] the whole county. I really just need this one county because that’s where everyone lives. Is that really underserved? Blah, blah, blah,” that kind of stuff and then you guys will go off and work with them for more of that detail then maybe you release that back into the product as a feature if it seems like a one-off or something. Is that how it works? Jason: It’s actually a very fluid process. An example of what you just described is exactly what happens if hey come to us with questions. But we also do it where we flip it around because a lot of products that we create are more aggregate discussion tools. We don’t design a lot within our primary visualization package. To really get into the weeds and everything just becomes overwhelming. We have other tools like your traditional [00:21:22] pivot table to kind of dig into that stuff. But the exact example that you just gave, they will ask us those questions, but we will also flip the script and say, “Hey, we saw that the mechanical chain in the Northeast is up 50%,” I’m just making up a number, “and at a higher level, you can see that but when we segment it out, here’s what we see. Not only when we break this down to this level, we see that’s specifically being driven by A, B and C.” That gets to where I push heavier at my team to do root cause analysis. That’s really where we provide value is by digging into it and asking questions like that. Again, operating from the lens of trying to solve a problem or answer a question or root cause something in conjunction with the business. A lot of times, we will ask those questions and at the same time, they will ask us, which is great. It’s amazing because you get the better solution faster. Brian: I think that’s great. I’ve worked on several different tools that have varying sophisticated means of doing root cause analysis and I think it’s a really powerful way to bring some why to a what that has happened in the past. Most of the time, why is really where the money is at. The value comes in being able to understand why. A lot of times, we don’t have all the data. You can’t know for sure but a lot of times I tend to say, “Our guess, if they’re just going to make a WAG—a wild ass guess—then our guess, as long as we qualify what ingredients went into the pie, our guess may be better than any WAG.” They’re going to make one already. If they’re going to make a decision here and go off gut, there is maybe a chance they’re right and their experience will say something. But maybe our elementary root cause analysis, which we can improve over time, will actually be better and we can get out of the total guessing game and start with something that’s kind of a macro ballpark thing. Then overtime, you can improve that analysis as new data becomes available or maybe learn about how two variables are related in the business and you can bring that knowledge into the system. I totally hear what you’re saying. It’s a nice mix of internal product plus services and also, it sounds like it gets you guys do good discovery work as well. You guys are not just responding to questions but you’re maybe asking them questions together as a group. You kind of work through what opportunities maybe latent that no one’s talking about by asking questions using data to do that. Jason: Yeah. In the lens that we’ve been talking through, this is really sales-centric, but this applies to any group that we interact with. We have the same level of proactive discussion with any group that we interact with. In some of these, in our market research side, it’s 100% proactive. We’re going out there scouring for information and trying to see the other things that we see. That one it’s completely proactive and now we bring insights to the business and say, “What do you guys think?” The sales one is the most fun because, let’s be honest, there’s no business if you’re not selling anything and nothing happens until a sale is made. Brian: Right. I get that. You talked about other clients, do you work at all with the actual hardware, is there any IoT type of analytics going on with the boilers and machinery that you guys create? Jason: We’re early in that process. We actually are getting ready to go down that task very soon. On the hardware side, we tend to not have as much involvement. That’s really more on the engineering group. I think for any manufacturer product or engineering groups probably going to be the most involved in that. But obviously, we get involved into the discussions of answering the fundamental question. What are we actually going to do with this data when we collect it? Because as you can imagine, IoT can spit out a lot of data real quick. They can become incredibly burdensome very quickly if you don’t have a plan on how to manage it. But then, if you’re going to go through the effort of managing that, you got to be able to say, “What are we going to do with this?” Brian: Yeah. I guess the first thing that would come to mind for me would be predictive maintenance, like, “Is it going to break down soon?” I worked on a cooling company that does cooling and really as the guy told me is like, “We’re not selling refrigeration. We’re selling consistent temperature to our clients. It’s not really about coolers and all of that, so we need to deliver consistent temperature. If we don’t do that, they lose products, they can lose whatever is being stored in cold storage.” That is significant business. I’m sure for you guys, it’s heat, you want to sell heat so how do you get in front if there’s a maintenance plan or whatever, how do you stay on top of that kind of stuff? Jason: Absolutely. Brian: [00:26:13] IoT. One of my clients used this word one time, which I now use all the time which is like, “We don’t want a metrics toilet.” An example of you can get to a metrics toilet really quickly with every stat under the gun and how many ounces of water per minute through this pipe, that’s great because that’ll help me do, as a sales guy or as a technician, how am I going to use that information just because there’s a sensor on that pipe. It’s working something around like, “Oh, there’s a sensor. Put the data in the grid.” Jason: I’m going to have to borrow that. I’ll give credit whenever I use ‘metrics toilet,’ that’s a pretty good one. I may actually [00:26:56]. Brian: Nice. Tell me, where does it go from here? You had mentioned like, “Oh, the competitive edge, maybe it’s closing.” Or maybe you guys feel your competitors are all kind of maybe they’re doing the same thing that you guys are doing and we are all aware of where the data can be used to drive the business. Are there other places where you see design or technology like predictive analytics or machine learning and some of these other new technologies that are out there to help drive predictions and things like that? Are you guys leveraging any of that or have plans to look to the future? What does that look like? I know you probably can’t talk about everything but maybe broadly. Jason: Absolutely. I would say that that’s content that’s definitely, if it’s not already being done then it’s on our radar. We’ve got a pretty talented team here that goes a lot of your traditional data science turf. As you can probably surmise in this conversation, is in addition to having all skills, we’re probably the most heavily focused on the business side. As we say, we explore opportunities for a lot of this. We always look at it, again, like machine learning. Great, but we got to make sure it’s very powerful stuff. We got to make sure that whatever we’re embarking upon, because we have finite work capacity, if you pursue something, machine learning, it means we’re not doing something else. It’s not to say that it’s not important, but we really have to be able to answer to that question. Again, come back to, “This is our anchor. What are we going to do with it?” I love this stuff. I love the stats. I love machine learning, AI, all that stuff. If you’re not careful, you can really quickly get into an academic exercise that we think is really cool. “Oh wow, look at this. We’ve got this awesome algorithm here. It does all this magical stuff,” and then the business looks at it and goes, “Yeah, so what? I don’t care. How does that generate revenue? How does that improve our margins? How does that reduce our cost? How does that enable to build the sales pipeline?” If we can’t answer those base questions and we don’t get alignment, that’s probably the most important thing is executive buy-in on exactly what we’re going to be working on, why it’s important. No, we don’t pursue it but those things are most definitely, as with any analytics teams today, I think that that content is definitely being done and/or on your radar. Brian: You make a really good point. Sometimes I almost hesitate to ask the question. But I think it’s an exciting space in terms of predictive capability and removing viable analysis and what we call time tool time in the design world, there is there. But at the same time, you make a really good point which is again, these are tools that need to be leveraged to service an opportunity or a problem. The goal is not to go do the machine learning, the goal is to solve a business problem by which machine learning maybe applied a better […] do it, reduce cost or reduce effort, speed, something like that. I completely respect that. I’m glad to hear that you guy are looking that as not a leading step. I know there’s conflicting signals out there. I’ve been talking to people in the International Institute for Analytics about this and at the same time you hear a lot of stuff which is, “If AI is not part of your strategy, you’re going to be missing out,” and boards just want to hear that people are doing AI. At the same time, you’ve got academic exercises going on, you’ve got people trying to take on massive like, “We’re going to shoot for the moon,” and it’s like, “You don’t even have an airplane and you’re trying to go to the moon with this thing. Show us a small win if you’re going to do an investment in AI.” It’s okay to go try it out and say, “Let’s do a small thing but let’s try to solve a business problem or have some definable output that we’re looking to do here such that we’re not just writing code and doing experiments.” I hear there’s a problem with people putting this on their resume. It’s like people just want to have machine learning. Everyone’s a data scientist now that used to stay in analytics. [00:30:47] It’s scary in the sense of just wasting opportunity and wasting money because at some point, your smarter competitors are going to be saying, “This is a new hammer. Let’s find some nails that we can use for it. But we think […] right nails and it needs to be the right application before we whack at it. It’s not just […].” Jason: I really like your point because again, if my peers were listening to this they will laugh because they say, “We are professionals of this trade and the tools that we might want to use might not be the right tool to use for a specific job.” I couldn’t agree more with that sentiment. It’s one of those core philosophies that I have and share with my team. Also to it is with the AI. I think that you truly made a very astute observation here and comment in that, I think a lot of companies do feel compelled to have to make significant investment in AI like today. It’s not to say that there’s not merit. There clearly is plenty of merit and plenty of potential there, but kind of your point, I really believe that it’s much more beneficial when you really minimize the risk of project and budget flow and minimize overall project risk. You take that small bite and try a little bit, then try a little bit more. When you get to win, socialize the win, and your executives feel comfortable because I’ve done it on the analytics side. I went for a big bang approach and after nine months they were like, “Hey, man. Where’s the output?” All you need is to get bit by that once and then you realize that small quick wins are very effective because at its core, it’s really important to get executive buy-in. A lot of executives are not willing to wait nine months or a year for something when they’re expecting to see at three months. I totally agree with your sentiment. Brian: When you talked about the wins, I totally understand if you’re close to it and maybe hard to remember those, but is there a particular story or time where something in the product and the insights that you guys put out to your customers that it was like a real win, like a sales guy said something to you or maybe an executive said something to you about how this moved the needle, like this was a memorable moment for us. Like, “I changed a customer’s mind with this,” or, “We closed the sale that we never would have been looking over here if we didn’t do it.” Do you have any anecdotes like that that you can share? Jason: One that we had recently, again, just for confidentiality purposes I can’t get too deep. Brian: Sure. Jason: We did have one recently where we just basically revamped our insights packages that we distribute to our internal team. We really, really gathered feedback. We had version one, we gathered ton of feedback, kind of refined, iterated, got the feedback without making it a major release. Got feedback, refined it, refined it, and then what we did was, with a small group, we got that beta in their hand, they look at it and they’re like, “This is great. This is exactly what we need.” Because what we were doing, what we found was—I’m sure you’ve experienced this—everybody wants their own part of things. Everybody wants certain view of a report or they want certain insights or whatever it is, and it’s great. But if you have limited resources, really high-powered resources like an analytics team or data science team, you’re going to look at the opportunity cost of trying to do one of these one-offs, we were getting a ton of report flow. Again, what I tell my team, I don’t mean to be derogatory to the DI guys in this comment, but my team’s side, I always tell them, “We don’t create value if we’re just creating reports. We create value when we’re actually partnering with business to extract insights, identify opportunities amidst all that stuff that goes well with it.” What we realized though is that, what started out as a nice, clean, three- or four-page insights package and blow it up to like 20 and [34:21] doesn’t that meet our original criteria? Essentially, what we do is once we have the rationalization enough to say, “Okay, we’ve got all these stuffs right across 20 pages. We can actually distill it down to four pages.” It will give you the exact same information, but it might not look the exact way that you wanted it to look. The question becomes, are you willing to deal with less stuff and maybe have it look a little different, but you’ll get it in a much more concise package that you’re actually able to use and process? What we found out is that a lot of people were doing these packages and getting the reports that they want but they weren’t actually using them to drive decision-making because they can’t see the paragraph or the block of text story before. They look at it and they’re like, “I don’t know what the hell to do with this.” We would dial that in and it just been a screaming success. It’s really nice to have it where something like that you see the evolution of it. This is just one of those things that we had, and this was kind of a side package or wasn’t a primary, but it’s become a primary now because it’s so effective. Brian: Would you say that when you talk about reducing this, is the report like a PDF or do they access it through a browser the insights package? Jason: Yeah, we have the options to do both. We distribute it initially via PDF, sometimes along with our comments if there’s really, really big stuff in there. We’ll say, “Hey, we see this. Here’s a driver. Here’s a supplemental package.” A lot of times it’s PDF first and then if they want to go on the web, start interacting with it, they can do that. Those are nice, but the reality is a lot of them don’t do that which is understandable. Brian: You took it from 20 pages down to 4, is that what you’re saying? Jason: Yeah. Same information. Brian: This is a really good point. I’ve frequently had clients come in and they’re with data products and their concern is information overload. We’ve heard this a lot of times and the irony is that, the issue is usually not information overload. It’s usually a design problem that the information is not presented properly because sometimes, it can increase the density and increase the utility and usability, not the other way around. In fact, removing data can actually make it worse. A basic example of that is when you’re trying to compare A and B. If A and B are not on the same, what we call a viewport like in a browser world, it would be within the browser window there. When you require someone to toggle between two screens, they have to change context and visually, your eye can process the information a lot better when it’s within proximity. Sometimes, increasing the density actually will give you a better design. It takes more care in how you do it, but it’s not always about information overload, “Oh, it’s too crazy.” They may not get it on the first time but your sales people, if they’re looking at this stuff weekly or monthly, at some point they’re going to be pretty comfortable with this. I always tell my clients, “You need to look at the switch frequency as well because if it’s going to be used a lot, you can actually get more detailed and you can really push the, what you might see as complexity or the information density, can go up because they’re going to get familiar with the formatting. Typically, the density is actually going to probably improve the utility as long as care is given to the choices. But having that eyeball comparison without having to change pages and all of that, typically you’re going to give a better story as a broad rule. I like hearing that you guys went down in page count, up in density and in turn a better user experience at the end so that’s great. I think we’re about done here. I don’t have too many questions for you, but this is super great. One of the reasons I contacted Jason is because I remember seeing this quote, “Jason is like a category five hurricane in the data analytics world.” I’m like, “Who the hell is this guy? No one talks like that.” I started reading your stuff and I enjoyed watching your LinkedIn social posts and things like that. Where can people find out more about you? You’re obviously on LinkedIn, I can put LinkedIn in the show notes and stuff, but are you on Twitter, any social media places they can follow you? Jason: No, actually, I’m not on Twitter. But the best place unquestionably is going to be LinkedIn. I’m pretty involved there. I do like to engage. If you want to direct message me with questions, just talk, meetup, connect, whatever it is, I welcome that. I love the platform, it’s a great family. I just really started using it maybe nine months ago, really getting into it. It’s been great meeting guys like yourself. It’s actually phenomenal. Brian: Cool. I’ll put a link to Jason’s LinkedIn profile on there and you guys can find him. I recommend, especially if you’re in an internal analytics type of role at your company, to follow Jason and then check out what he has to say on there. This has been great. Thanks for coming on the show. I look forward to meeting you at some point in person. Jason: Dude, thank you for having me on here. I really appreciate it. We hope you enjoyed this episode of Experiencing Data with Brian O’Neill. If you did enjoy it, please consider sharing it with #experiencingdata. To get future podcast updates or to subscribe to Brian’s mailing list where he shares his insights on designing valuable enterprise data products and applications, visit designingforanalytics.com/podcast. Never forget to look up the online HTML CheatSheet when you forget how to write an image, a table or an iframe or any other tag in HTML! [bws_google_captcha] Subscribe for Podcast Updates Get updates on new episodes of Experiencing Data plus my occasional insights on design and UX for custom enterprise data products and apps. Email Address [text-blocks id="eu-consent-checkbox-textblock" plain="1"]

Jason Krantz is the Director of Business Analytics & Insights for the 135-year old company, Weil McLain and Marley Engineered Products. While the company is responsible for helping keeping homes and businesses warm, Jason is responsible for the creation and growth of analytical capabilities at Weil McLain, and was recognized in 2017 as a “Top 40 Under 40” in the HVAC industry. I’m not surprised given his posts on LinkedIn; Jason seems very focused on satisfying his internal customers and ensuring that there is practical  business value anchoring their analytics initiatives. We talked about: How Jason’s team keeps their data accessible and relevant to the issue they need to solve for their customer. How Jason strives to keep the information simple and clean for the customer. How does Jason help drive analytics in a company culture with a lot of legacy (from its people to its parts) The importance of focusing on context How Jason drives his team to be business partners, and not report generators Resources and Links:  Jason Krantz on LinkedIn Quotes from Jason Krantz:  “You realize that small quick wins are very effective because, at its core, it’s really important to get executive buy-in.” “I’m a huge fan of simplicity. As analytics pros, we could very easily make very complex, very intricate models, and just, ‘Oh, look at how smart we are.’ It doesn’t help our customers. …we only use about two or three different visual types and we use mostly the exact same visual set-up. I can train a sales rep for probably five minutes on all of our reporting because if you understand one, you’re going to understand everything. That gets to the theme again of just simplicity. Don’t over complicate, keep it simple, keep it clean.” “…To get buy-in, you really got to have your business case, even to your internal customers, really dialed in. If you just bring them a bunch of crap, that’s how you’re going to lose credibility. They’re going to be like, “I don’t have the time to waste with you,” even though we’re trying to be helpful.” “What my team and I do is we really help companies weaponize their data assets.” Episode Transcript Brian: Jason, are you there? Jason: I’m here my friend. Brian: Sweet. How’s it going? Jason: It’s going very well today. How’s your Friday going? Brian: I’m doing awesome. We’re going to talk a little bit about analytics. Is it Wile McLain or Weil McLain? Jason: I say Weil McLain. If I’ve been saying it wrong, I’ve been saying it wrong for a while. Brian: As I recall from my musical training, I think in German, the second syllable is the one that says its name. I guess it would be Wile McLain, like if it was W-I-E-L it would be ‘Weil.’ But I don’t know. Its anglicized as they come over the pond. Jason: I’m going to go with you on that when you sound like an expert. Brian: Nice. Well, you sound like an expert in analytics at Weil McLain. Tell us about what you’re doing over there. We met on LinkedIn, I’ve been enjoying your postings on the social feed about your approach. You seem really passionate about what you’re doing and I’m like, “I don’t know who this guy is, but that was really interesting.” I just have. Tell us about the company, what they do. I know they’re in heating, right? Jason: Yes, absolutely. The company I work for, and I work in the HVAC space, we’re a 135-year-old boiler manufacturer. Whether you realize it or not, you probably have one of our products in your house or building or very close to where you live. What my team and I do is we really help companies weaponize their data assets. As you know, a lot of companies are very skilled at acquiring data since the Big Data Movement. But the reality is that a lot of these companies don’t know what to do with all this data. That’s where we really come in. What I always tell my team and our business partners that we work with internally and externally is that our focus is on solving business problems. In order to do that, you have to identify what is the business problem that you’re trying to solve or strategic agenda that you’re trying to address. In order to do that, you really have to be anchored in the biz. Again, that’s just my perspective, but if you’re in the business day in, day out, you develop this very keen stand of what the business would need to accomplish its objectives. Just like right now, we are based in the marketing group and it’s a great spot to be. I’m a firm believer that every analytics team should be based in the business for a reason that I just talked about. But what that does being business-first is that gives us a great lens to look at data from. Sometimes analytics people would be IT-centric and they can do a lot of academic work against the data set or different data sets. But the business might look at the output and be like, “Yeah, that doesn’t help us.” We always, always, always start with, “What is the business problem we’re trying to solve or strategy we’re looking to address?” It also helps us when it comes to curating data also. That’s one of our primary response [00:03:21] this too, is to look for different data sets both internal and external that can help us identify strategic opportunities. It sounds really unsexy, I’m not going to lie. I think some of my LinkedIn post just say that data is boring. It really is. It’s mind-numbing, too, about 85% of my customers. But that’s the important part is understanding what do our customers need and that’s really the lens that we look at this through. We are a service provider, our customers are internal and external, we have customers just like any other business. We have to take this really boring, but really potent product in data and make it accessible to them. That’s really where we use design to really try to make that magic happen. Brian: I love that you said, “Trying to understand what the problem is.” This is something we talk about on the mailing list quite a bit. In fact, falling in love with the problem is a good basis for doing good work instead of kind of jumping to solutions or feeling […]. As I tell my clients sometimes like, “Our job is not to go and visualize the data. It’s not […] available for someone to put into another tool or whatever the heck it is. The job is to find an insight that already is used. Probably they’re already in your job and you’re there to make […] if you’re doing internal analytics. Help them do a better job at what they’re doing, offer more value. You need to figure out how to work that into their life.” For example, for you guys then, your customer, I assume is it primarily sales people that you’re working with? Who are your customers and your […]? Jason: Yes. Great question. One of our biggest customers is sales. Sales has been one of my biggest customers for the past 10 years of my career. I’m very intimately involved with the sales team, sales operation, sales optimization, insight gathering, pricing, things like that, but also marketing. We do a lot in terms of competitive intelligence gathering, market research. We also do a lot of operations in finance obviously related to the prices, that sort of thing. We really touch all areas of the business, but without question, our biggest customers are going to be sales and marketing. Brian: If you were to bring a new initiative like, “Hey, we have access to…” I don’t know what it might be but for you maybe your point, [might be a line 00:05:49] of data that could actually give them more leverage. We know what the negotiation brings, better than […], we know we kind of have an idea now from what the industry is doing for their sales such that we can now tell the CRM like, “This is your […] or something.” When do you get that sales person involved? Do you deliver a solution and get feedback? Do you bring […] early and say, “Hey, we think we can tell you more about how to do better pricing on the spot with this thing.” Do you bring them in or when do they fit into your process? Jason: Great question. A lot of times because we spend so much time actually in the trenches, that’s one of things I think is unique about the way that I design my teams to do analytics. It’s not like hand off product and we’re like, “Godspeed. Good luck.” Once we deliver a solution, we’re actually in the trenches with the business trying to implement what we’re talking about because it just works better. The team work is just more effective and they know that they’ve got back up, they know they’ve got air support. Really, a lot of times when we come up with something new, a lot of times we will frame it from the lens like, “Hey, we know that we’ve got opportunity A or issue B, or whatever it is. This has been an issue or an opportunity for months or years or whatever.” We think that we’ve identified something that could help us in solving that issue or realizing the potential of that opportunity and then it becomes, “Okay, let’s sit down and talk about, do you agree that this might actually help us in this process?” Because the one thing that I’ve learned is, in order to get buy-in, you really, really got to have your business case, even to your internal customers, really dialed in. If you just bring them a bunch of crap, that’s how you’re going to lose credibility. They’re going to be like, “I don’t have the time to waste with you,” even though we’re trying to be helpful. What we found out is if you really dial in what are we trying to address with this, just as you would with any business case, and you bring that to them, I have found that they tend to be much more receptive. It’s not to say there’s not going to be resistance—resistance comes with any change—but we found that typically framing it from that lens and saying, “We’re trying to solve a problem that you have, we think that this data will help,” that’s a great starting point. Brian: Do you have an example of a before/after with that? I don’t want you to get into proprietary stuff you can’t talk about but is there like a, “Before they did it this way,” and then we brought them in and said, “Hey, we think we can get […].” and how you went [00:08:19]. Jason: Yeah. What I can talk about is just the manner in which we distribute sales information, specifically insights. I think that, for your listeners, this is going to ring true to a lot of sales forces. I know for all them that I’ve been in or worked with, this case was true 100% of the time. But one of the things that, again, keeping the customer-centric focus, that if you look at your sales reps, a lot of time is you’re going to be what I call casual data consumers. By that, I mean that these are guys and gals that aren’t really into data day in and day out like guys like you and I or some of the listeners maybe. What we have to do is, as I always encourage my team to take empathetic lens and look at, “Okay, if we give them what our first […] is going to look like, how are they going to interpret this?” A lot of times, to be honest, it’s not very good. Now that’s where we have to look at internally and kind of rationalize and say, “Okay, let’s find this. One of us will find [00:09:14].” But one example of that is traditionally, sales reps and sales teams will get the information in a flat Excel table. Just lots of rows and columns and just gibberish everywhere. That’s a very financial-centric view of sales data. But the reality is—I don’t know about the rest of mankind but I know for myself—I can’t remember much more than 10 numbers. The mental computational cost of extracting insights is just gargantuan. What happens is, I just don’t even bother to do it. I’m just like, “Yeah, whatever.” An equivalent of that is, you know if you get a big block of text in email? Even though if you took that same block of text and broke it up into two paragraphs or two sentence segments which is very easy to read when you put the effort in, but for me, if I get a big block of text, I’m not even going to read that. It’s kind of one of the same things that we see on the sales side. What we do is just say, “You know what? There’s a lot of really good information here and we need to make it digestible for our customers.” That’s where we found traditionally, visualization can be an incredibly effective tool to communicate insights to this casual data audience, to this casual data consumer. Brian: Do you have to work through the visuals with them? Do they tend to get it the first time? Is it a process of you share, “Here’s a report or here’s some new view on X.” How do you know if the visualization is actually allowing them to pull the insight out of what other [00:10:46] broad data? How do you know they’re actually “getting it”? Jason: That’s a great question. I’m a huge fan of simplicity. As analytics pros, we could very easily make very complex, very intricate models, and just, “Oh, look at how smart we are.” It doesn’t help our customers. It doesn’t help anything. Really what we do—this is going to get to the theme of simplicity—is we only use about two or three different visual types and we use mostly the exact same visual set-up. Just to kind of frame it, what I’m a big fan of is a simple bar chart. There’s more details attached to it but to the right of the bar chart, we’ll typically put a tabular data set. What we do is, as you think in US at least, we start in that left-hand side of the page or we […]. What we do is we look at the visual real estate. We say, “Our customers are going to start in the left-hand side. We want them to look at the bar chart because it allows them to very rapidly assimilate it at a high-level what’s going on.” It’s great at communicating at top-level churn very quickly but the trade-off is, is this horrible imprecision. You have no precision at all. What we like to do is then we address that issue by putting a simple table, very clean, very simple table over to the right. What that does is that then provides the precision that the customers are seeing in most financial-centric tables. What we found that does is that we have to train our sales team on one set-up and then that set-up is used virtually universally on all of our solutions. As an example, I can train a sales rep for probably five minutes on all of our reporting because if you understand one, you’re going to understand everything. That gets to the theme again of just simplicity. Don’t over complicate, keep it simple, keep it clean. Brian: I think those are good. A lot of times, when I work with engineering clients, they fall in love with consistency. I guess one point to maybe just the contrary of this is that, I think consistency is generally a good rule with design. We want to minimize unnecessary change but at the same time, I would recommend to listeners is to always look at context first, and context should always come in. Let’s say Jason comes up with report number 12 and they have 11 now or whatever, and it doesn’t feel right for number 11. That’s a place where a designer would probably push for, “Well, no. The 12th one actually needs to be different because it’s not […] 11th and even though it’s not consistent, in this context, we don’t need it to win. This version will deliver the usability and the utility that we’re looking for better than the other 11 will.” In general, I think it’s smart to not get creative unnecessarily with meaningless ink on the screen like, “Let’s try it this way. Let’s change the color palette. I’m tired of this.” Those are not good reasons for […], you’re just introducing noise and it’s unnecessary. But I like that you guys are thinking about simplicity and trying to reuse templates and not looking at it as a creative tableau. Ironically, people think it’s a creative “design” tool, but at the same time with all those weapons, you have a lot of different weapons you can use in that toolkit and part of that is knowing how to use this. It’s the same thing with Photoshop, a million buttons and all this stuff. The Photoshop doesn’t make you a designer. It’s being aware of your customer’s pain and the problems they need and knowing when to use all those filters and all those different things that it can do. I like that you guys are looking into that simplicity and reusing templates when it’s meaningful to do so. Jason: You bring up some great points and I 100% agree. My team that’s listening there, they’ll laugh because I beat it in their heads, “Context. Context, context, context.” Both in design as you’ve talked but especially with numbers in general. Like, “If I give you a number, a billion, that doesn’t mean anything, you got to have context.” I’d say the same is true for design just as you articulated. Great point. Brian: Where does the impetus for “everybody is a data company, everybody wants to do analytics”? But then there’s operationalizing that, there’s getting buy-in, leadership behind it. Where does that come from in your org? Where is the interest in taking a 130-year-old company and getting it to care about this? Where does that come from, your influence and all of that? Jason: That was driven by our current president because he saw it as part of a digital transformation. Obviously, this was an essential component of that. Obviously, we do a lot with analytics, but we’re also involved in a lot of other digital components that lead to that overall digital maturation. Analytics is a very, very big part of what we do but it’s not all that we do. We serve as kind of that quarterback for a lot of the digital initiatives to help basically, guide them through the process. Because even though some of the nuances of each of this project, each one will have its own nuances, they all come back to data. Data is the currency. We found out pretty quickly that if you want to stay relevant in this day and age, you need to be digitally evolved but more importantly, as you look at it, do you [compare the 00:16:02] advantage that you can derive from analytics? I would argue that gap is slowly closing known certain industries like manufacturing, but we probably have a little bit more runway [00:16:10] it. But for a lot of industries, analytics is becoming table stakes. It’s one of those where you can certainly expect incremental value and competitive advantage, but the question becomes how much longer. That was kind of the impetus of saying, “Hey, we got to get this going sooner rather than later.” Brian: Do you have people in sales that are resistant to using the reporting or taking advantage of your information or is it pretty ingrained in the company culture that it’s like, “This is a tool. Why would you not want to use it?” Or did you guys have a […] getting adoption? Jason: Yeah. I would say anytime you’re going through a transformation of this magnitude, it’s hard and I would say especially for other manufacturers. I found in general, manufacturing in general, tends to be one of the laggards industry-wise in analytical maturity. Unquestionably, it’s tough for no other reason than change is tough. You’re taking legacy plants, legacy steer pieces, legacy process, and some people has been around the company for decades potentially, and we’re asking them to change almost on a dime on their time scale how they do business. It’s not that it’s right or wrong but what we try to point out is that, as I always say, we have to acknowledge the past. We’ve been where we’ve been, we’ve been successful at where we been. But there’s been more change in the past two or three years than maybe you’ve seen in the past 15-20 years. In order to stay relevant, you really have to be ready to evolve, not only evolve but evolve quickly. But I have to openly acknowledge that that’s hard. It’s a hard proposition for a lot of people. Again, it comes down to change management and managing not only expectations but supporting that change. Change doesn’t happen by itself, we have to support that. That’s really what we try to coach through. The way that we try to do that is by developing a product with our customers. I’m sure as you can […], if you force something upon somebody, it doesn’t get received too well. But if you develop it in conjunction with them and do tie it around their needs, it tends to get better adaptation. Brian: You used the word product in there and I’m interested, do you see the outputs of your efforts? Primarily, it’s BI reporting as I understand it. Do you look at that as the product that you offer to sales? Is that kind of how you see it? Jason: Yeah. We offer a product in the form of the insight packages but it’s also the service. Service that goes with it where again, we serve as essentially internal consultant to help them along. If you take just the product-centric approach, you just deliver an insight package and you’re like, “Good luck. It’s [00:19:35]. Have at it.” What we do is we deliver the product and then we partner with them and say, “Okay, here’s what we see. Now, remember you’re talking about this going on in the channel last year and our note show that there’s been a lot of competitive activity in this area. Here’s some of the question that we have. You’re the expert, so what do you think?” What we found is that working together like that, we tend to get pretty good results versus just leaving these guys on an island to kind of figure it out themselves because they virtually always know the answer but sometimes it’s up to us using these products and then offering the service is to ask question that maybe aren’t getting asked. A lot of times, we find out that they know the answer it’s just that you kind of have to ask the question. Brian: Is that often like, “I was using XYZ report. Could you break this down by county instead of just by whatever because I feel there’s more people living in the East side of town and the average is here or […] the whole county. I really just need this one county because that’s where everyone lives. Is that really underserved? Blah, blah, blah,” that kind of stuff and then you guys will go off and work with them for more of that detail then maybe you release that back into the product as a feature if it seems like a one-off or something. Is that how it works? Jason: It’s actually a very fluid process. An example of what you just described is exactly what happens if hey come to us with questions. But we also do it where we flip it around because a lot of products that we create are more aggregate discussion tools. We don’t design a lot within our primary visualization package. To really get into the weeds and everything just becomes overwhelming. We have other tools like your traditional [00:21:22] pivot table to kind of dig into that stuff. But the exact example that you just gave, they will ask us those questions, but we will also flip the script and say, “Hey, we saw that the mechanical chain in the Northeast is up 50%,” I’m just making up a number, “and at a higher level, you can see that but when we segment it out, here’s what we see. Not only when we break this down to this level, we see that’s specifically being driven by A, B and C.” That gets to where I push heavier at my team to do root cause analysis. That’s really where we provide value is by digging into it and asking questions like that. Again, operating from the lens of trying to solve a problem or answer a question or root cause something in conjunction with the business. A lot of times, we will ask those questions and at the same time, they will ask us, which is great. It’s amazing because you get the better solution faster. Brian: I think that’s great. I’ve worked on several different tools that have varying sophisticated means of doing root cause analysis and I think it’s a really powerful way to bring some why to a what that has happened in the past. Most of the time, why is really where the money is at. The value comes in being able to understand why. A lot of times, we don’t have all the data. You can’t know for sure but a lot of times I tend to say, “Our guess, if they’re just going to make a WAG—a wild ass guess—then our guess, as long as we qualify what ingredients went into the pie, our guess may be better than any WAG.” They’re going to make one already. If they’re going to make a decision here and go off gut, there is maybe a chance they’re right and their experience will say something. But maybe our elementary root cause analysis, which we can improve over time, will actually be better and we can get out of the total guessing game and start with something that’s kind of a macro ballpark thing. Then overtime, you can improve that analysis as new data becomes available or maybe learn about how two variables are related in the business and you can bring that knowledge into the system. I totally hear what you’re saying. It’s a nice mix of internal product plus services and also, it sounds like it gets you guys do good discovery work as well. You guys are not just responding to questions but you’re maybe asking them questions together as a group. You kind of work through what opportunities maybe latent that no one’s talking about by asking questions using data to do that. Jason: Yeah. In the lens that we’ve been talking through, this is really sales-centric, but this applies to any group that we interact with. We have the same level of proactive discussion with any group that we interact with. In some of these, in our market research side, it’s 100% proactive. We’re going out there scouring for information and trying to see the other things that we see. That one it’s completely proactive and now we bring insights to the business and say, “What do you guys think?” The sales one is the most fun because, let’s be honest, there’s no business if you’re not selling anything and nothing happens until a sale is made. Brian: Right. I get that. You talked about other clients, do you work at all with the actual hardware, is there any IoT type of analytics going on with the boilers and machinery that you guys create? Jason: We’re early in that process. We actually are getting ready to go down that task very soon. On the hardware side, we tend to not have as much involvement. That’s really more on the engineering group. I think for any manufacturer product or engineering groups probably going to be the most involved in that. But obviously, we get involved into the discussions of answering the fundamental question. What are we actually going to do with this data when we collect it? Because as you can imagine, IoT can spit out a lot of data real quick. They can become incredibly burdensome very quickly if you don’t have a plan on how to manage it. But then, if you’re going to go through the effort of managing that, you got to be able to say, “What are we going to do with this?” Brian: Yeah. I guess the first thing that would come to mind for me would be predictive maintenance, like, “Is it going to break down soon?” I worked on a cooling company that does cooling and really as the guy told me is like, “We’re not selling refrigeration. We’re selling consistent temperature to our clients. It’s not really about coolers and all of that, so we need to deliver consistent temperature. If we don’t do that, they lose products, they can lose whatever is being stored in cold storage.” That is significant business. I’m sure for you guys, it’s heat, you want to sell heat so how do you get in front if there’s a maintenance plan or whatever, how do you stay on top of that kind of stuff? Jason: Absolutely. Brian: [00:26:13] IoT. One of my clients used this word one time, which I now use all the time which is like, “We don’t want a metrics toilet.” An example of you can get to a metrics toilet really quickly with every stat under the gun and how many ounces of water per minute through this pipe, that’s great because that’ll help me do, as a sales guy or as a technician, how am I going to use that information just because there’s a sensor on that pipe. It’s working something around like, “Oh, there’s a sensor. Put the data in the grid.” Jason: I’m going to have to borrow that. I’ll give credit whenever I use ‘metrics toilet,’ that’s a pretty good one. I may actually [00:26:56]. Brian: Nice. Tell me, where does it go from here? You had mentioned like, “Oh, the competitive edge, maybe it’s closing.” Or maybe you guys feel your competitors are all kind of maybe they’re doing the same thing that you guys are doing and we are all aware of where the data can be used to drive the business. Are there other places where you see design or technology like predictive analytics or machine learning and some of these other new technologies that are out there to help drive predictions and things like that? Are you guys leveraging any of that or have plans to look to the future? What does that look like? I know you probably can’t talk about everything but maybe broadly. Jason: Absolutely. I would say that that’s content that’s definitely, if it’s not already being done then it’s on our radar. We’ve got a pretty talented team here that goes a lot of your traditional data science turf. As you can probably surmise in this conversation, is in addition to having all skills, we’re probably the most heavily focused on the business side. As we say, we explore opportunities for a lot of this. We always look at it, again, like machine learning. Great, but we got to make sure it’s very powerful stuff. We got to make sure that whatever we’re embarking upon, because we have finite work capacity, if you pursue something, machine learning, it means we’re not doing something else. It’s not to say that it’s not important, but we really have to be able to answer to that question. Again, come back to, “This is our anchor. What are we going to do with it?” I love this stuff. I love the stats. I love machine learning, AI, all that stuff. If you’re not careful, you can really quickly get into an academic exercise that we think is really cool. “Oh wow, look at this. We’ve got this awesome algorithm here. It does all this magical stuff,” and then the business looks at it and goes, “Yeah, so what? I don’t care. How does that generate revenue? How does that improve our margins? How does that reduce our cost? How does that enable to build the sales pipeline?” If we can’t answer those base questions and we don’t get alignment, that’s probably the most important thing is executive buy-in on exactly what we’re going to be working on, why it’s important. No, we don’t pursue it but those things are most definitely, as with any analytics teams today, I think that that content is definitely being done and/or on your radar. Brian: You make a really good point. Sometimes I almost hesitate to ask the question. But I think it’s an exciting space in terms of predictive capability and removing viable analysis and what we call time tool time in the design world, there is there. But at the same time, you make a really good point which is again, these are tools that need to be leveraged to service an opportunity or a problem. The goal is not to go do the machine learning, the goal is to solve a business problem by which machine learning maybe applied a better […] do it, reduce cost or reduce effort, speed, something like that. I completely respect that. I’m glad to hear that you guy are looking that as not a leading step. I know there’s conflicting signals out there. I’ve been talking to people in the International Institute for Analytics about this and at the same time you hear a lot of stuff which is, “If AI is not part of your strategy, you’re going to be missing out,” and boards just want to hear that people are doing AI. At the same time, you’ve got academic exercises going on, you’ve got people trying to take on massive like, “We’re going to shoot for the moon,” and it’s like, “You don’t even have an airplane and you’re trying to go to the moon with this thing. Show us a small win if you’re going to do an investment in AI.” It’s okay to go try it out and say, “Let’s do a small thing but let’s try to solve a business problem or have some definable output that we’re looking to do here such that we’re not just writing code and doing experiments.” I hear there’s a problem with people putting this on their resume. It’s like people just want to have machine learning. Everyone’s a data scientist now that used to stay in analytics. [00:30:47] It’s scary in the sense of just wasting opportunity and wasting money because at some point, your smarter competitors are going to be saying, “This is a new hammer. Let’s find some nails that we can use for it. But we think […] right nails and it needs to be the right application before we whack at it. It’s not just […].” Jason: I really like your point because again, if my peers were listening to this they will laugh because they say, “We are professionals of this trade and the tools that we might want to use might not be the right tool to use for a specific job.” I couldn’t agree more with that sentiment. It’s one of those core philosophies that I have and share with my team. Also to it is with the AI. I think that you truly made a very astute observation here and comment in that, I think a lot of companies do feel compelled to have to make significant investment in AI like today. It’s not to say that there’s not merit. There clearly is plenty of merit and plenty of potential there, but kind of your point, I really believe that it’s much more beneficial when you really minimize the risk of project and budget flow and minimize overall project risk. You take that small bite and try a little bit, then try a little bit more. When you get to win, socialize the win, and your executives feel comfortable because I’ve done it on the analytics side. I went for a big bang approach and after nine months they were like, “Hey, man. Where’s the output?” All you need is to get bit by that once and then you realize that small quick wins are very effective because at its core, it’s really important to get executive buy-in. A lot of executives are not willing to wait nine months or a year for something when they’re expecting to see at three months. I totally agree with your sentiment. Brian: When you talked about the wins, I totally understand if you’re close to it and maybe hard to remember those, but is there a particular story or time where something in the product and the insights that you guys put out to your customers that it was like a real win, like a sales guy said something to you or maybe an executive said something to you about how this moved the needle, like this was a memorable moment for us. Like, “I changed a customer’s mind with this,” or, “We closed the sale that we never would have been looking over here if we didn’t do it.” Do you have any anecdotes like that that you can share? Jason: One that we had recently, again, just for confidentiality purposes I can’t get too deep. Brian: Sure. Jason: We did have one recently where we just basically revamped our insights packages that we distribute to our internal team. We really, really gathered feedback. We had version one, we gathered ton of feedback, kind of refined, iterated, got the feedback without making it a major release. Got feedback, refined it, refined it, and then what we did was, with a small group, we got that beta in their hand, they look at it and they’re like, “This is great. This is exactly what we need.” Because what we were doing, what we found was—I’m sure you’ve experienced this—everybody wants their own part of things. Everybody wants certain view of a report or they want certain insights or whatever it is, and it’s great. But if you have limited resources, really high-powered resources like an analytics team or data science team, you’re going to look at the opportunity cost of trying to do one of these one-offs, we were getting a ton of report flow. Again, what I tell my team, I don’t mean to be derogatory to the DI guys in this comment, but my team’s side, I always tell them, “We don’t create value if we’re just creating reports. We create value when we’re actually partnering with business to extract insights, identify opportunities amidst all that stuff that goes well with it.” What we realized though is that, what started out as a nice, clean, three- or four-page insights package and blow it up to like 20 and [34:21] doesn’t that meet our original criteria? Essentially, what we do is once we have the rationalization enough to say, “Okay, we’ve got all these stuffs right across 20 pages. We can actually distill it down to four pages.” It will give you the exact same information, but it might not look the exact way that you wanted it to look. The question becomes, are you willing to deal with less stuff and maybe have it look a little different, but you’ll get it in a much more concise package that you’re actually able to use and process? What we found out is that a lot of people were doing these packages and getting the reports that they want but they weren’t actually using them to drive decision-making because they can’t see the paragraph or the block of text story before. They look at it and they’re like, “I don’t know what the hell to do with this.” We would dial that in and it just been a screaming success. It’s really nice to have it where something like that you see the evolution of it. This is just one of those things that we had, and this was kind of a side package or wasn’t a primary, but it’s become a primary now because it’s so effective. Brian: Would you say that when you talk about reducing this, is the report like a PDF or do they access it through a browser the insights package? Jason: Yeah, we have the options to do both. We distribute it initially via PDF, sometimes along with our comments if there’s really, really big stuff in there. We’ll say, “Hey, we see this. Here’s a driver. Here’s a supplemental package.” A lot of times it’s PDF first and then if they want to go on the web, start interacting with it, they can do that. Those are nice, but the reality is a lot of them don’t do that which is understandable. Brian: You took it from 20 pages down to 4, is that what you’re saying? Jason: Yeah. Same information. Brian: This is a really good point. I’ve frequently had clients come in and they’re with data products and their concern is information overload. We’ve heard this a lot of times and the irony is that, the issue is usually not information overload. It’s usually a design problem that the information is not presented properly because sometimes, it can increase the density and increase the utility and usability, not the other way around. In fact, removing data can actually make it worse. A basic example of that is when you’re trying to compare A and B. If A and B are not on the same, what we call a viewport like in a browser world, it would be within the browser window there. When you require someone to toggle between two screens, they have to change context and visually, your eye can process the information a lot better when it’s within proximity. Sometimes, increasing the density actually will give you a better design. It takes more care in how you do it, but it’s not always about information overload, “Oh, it’s too crazy.” They may not get it on the first time but your sales people, if they’re looking at this stuff weekly or monthly, at some point they’re going to be pretty comfortable with this. I always tell my clients, “You need to look at the switch frequency as well because if it’s going to be used a lot, you can actually get more detailed and you can really push the, what you might see as complexity or the information density, can go up because they’re going to get familiar with the formatting. Typically, the density is actually going to probably improve the utility as long as care is given to the choices. But having that eyeball comparison without having to change pages and all of that, typically you’re going to give a better story as a broad rule. I like hearing that you guys went down in page count, up in density and in turn a better user experience at the end so that’s great. I think we’re about done here. I don’t have too many questions for you, but this is super great. One of the reasons I contacted Jason is because I remember seeing this quote, “Jason is like a category five hurricane in the data analytics world.” I’m like, “Who the hell is this guy? No one talks like that.” I started reading your stuff and I enjoyed watching your LinkedIn social posts and things like that. Where can people find out more about you? You’re obviously on LinkedIn, I can put LinkedIn in the show notes and stuff, but are you on Twitter, any social media places they can follow you? Jason: No, actually, I’m not on Twitter. But the best place unquestionably is going to be LinkedIn. I’m pretty involved there. I do like to engage. If you want to direct message me with questions, just talk, meetup, connect, whatever it is, I welcome that. I love the platform, it’s a great family. I just really started using it maybe nine months ago, really getting into it. It’s been great meeting guys like yourself. It’s actually phenomenal. Brian: Cool. I’ll put a link to Jason’s LinkedIn profile on there and you guys can find him. I recommend, especially if you’re in an internal analytics type of role at your company, to follow Jason and then check out what he has to say on there. This has been great. Thanks for coming on the show. I look forward to meeting you at some point in person. Jason: Dude, thank you for having me on here. I really appreciate it.

Kathy Koontz is the Executive Director of the Analytics Leadership Consortium at the International Institute for Analytics and my guest for today’s episode. The International Institute of Analytics is a research and advisory firm that discusses the latest trends and the best practices within the analytics field.  We touch on how these strategies are used to build accurate and useful custom data products for businesses. Kathy breaks down the steps of making analytics more accessible, especially since data products and analytics applications are more frequently being utilized by front-line workers and not PhDs and analytics experts. She uses her experience with a large property and casualty insurance company to illustrate her point about shifting your company’s approach to analytics to make it more accessible. Small adjustments to a data application make the process effective and comprehensible. Kathy brings some great insights to today’s show about incorporating analytic techniques and user feedback to get the most value from your analytics and the data products you build for the information. Conversation highlights: What is The International Institution of Analytics? What is the analytics leadership consortium? The “squishy” parts of analytics and how to compensate for them. The real value of analytics and how to use it on all levels of a company. How beta testers give perspective on data. The 3 steps to finding the ideal beta tester. Learning from the feedback and implementing it. How to keep ROI in mind during your project. Kathy’s parting advice for the audience. Resources and Links: The International Institute of Analytics Kathy Koontz on LinkedIn Surf Camps Thank you for joining us for today’s episode of Experiencing Data. Keep coming back for more episodes with great conversations about the world of analytics and data. Quotes from today’s episode: “Oftentimes data scientists see the world through data and algorithms and predictions and they get enamored with the complexity of the model and the strength of its predictions and not so much with how easy it is for somebody to use it.” — Kathy Koontz “You are not fully deployed until after you have received this [user] feedback and implemented the needed changes in the application.” — Kathy Koontz “Analytics especially being deployed pervasively is maybe not a project but more of a transformation program.” — Kathy Koontz “Go out and watch your user group that you want to utilize this data or this analytics to improve the performance.” — Kathy Koontz “Obviously, it’s always cheaper to adjust things in pixels, and pencils than it is to adjust it in working code.” — Kathy Koo Transcript Brian: I’m excited to have Kathy Koontz of the line. She is the Executive Director of the Analytics Leadership Consortium at the International Institute for Analytics. That’s quite a mouthful. Did I get that totally right? Kathy: Yeah. You did. I tell people, “Yes, it is a real job.” Yeah, you got it right, you nailed it. Brian: Tell our listeners, what does that mean? What do you do? Kathy: The International Institute for Analytics is an organization that was founded by Tom Davenport, one of the early readers and using analytics for business performance. We are research and advisory firm that helps companies realize value from analytics. Brian: How do you work with them in your leadership capacity there? What’s your specific role there? Kathy: I lead the product line that’s called the Analytics Leadership Consortium. What that is, is a group of analytics executives from different companies who are in non-competing industries that meet of a regular basis to better understand trends and best practices in analytics to vet ideas with one another and ensure that they’re doing the best that they can to deliver analytics value for their organization. A really great opportunity for leaders in this field of analytics that’s changing a lot and has a lot of emerging practices, have regular time to get together in a confidential setting to understand what’s working and what’s not, and how they can improve analytic values for their company. Brian: You mentioned trends, I obviously try to stay on top of what’s going on in that industry and that’s actually how I came across you, originally, I think was you guys had put on a webinar on five trends and analytics going on right now. At the end of that, you had mentioned that one of the things that’s starting to change now is the importance of design and user experience as we move beyond designing reports which is one of the most difficult deliverables, so to speak, of analytics—as we move into the user experience it’s becoming more important. That’s what I was like, “Oh, this could be really interesting to hear what you have to say about what’s changing. Why is UX now relevant? How is capital D design relevant to the world of analytics?” that’s what I was curious to learn about. Can you talk about that a little bit? Kathy: I think as analytics mature in organizations, the need for design is what’s going to drive adoption and utilization of those analytics. In companies that are just starting their analytics journey, it’s a little bit easier to realize analytic value by doing a couple of really big data science projects that don’t really require a lot of design thinking. It’s a powerpoint to an executive group that has some higher level of organizational level thinking that the executive lean in, understand the analytics, understand the value of making their decisions in line with the analytics and then move on and do their regular roles. But as the organizations try to make analytics more pervasive, particularly into front-line associates or individual contributors who are really using analytics to make a lot of small decisions within the execution of their work or as they try to integrate analytics into processes that are monitored, that design thinking taking an approach as user experience, can really break down a lot of barriers that organizations encounter when trying to have people who are not necessarily used to using analytics in their decision-making process, use them so that they can make a better decision for the organization. Brian: Got it. Is the trend that people are recognizing the problem because they went through some pain of maybe they delivered some big multimillion dollar platform, and like you said the front line associates didn’t use it. As I always use the example, it’s like, “They’re out driving a truck. They don’t have a laptop. They’re not going to go download a report and change the columns or whatever.” It’s like the wrong mechanism, you didn’t fit it into their job; you try to get them to change their job to accommodate your tool. Is the awareness because they went through a failure or is it like, “We already know this isn’t going to work if we don’t get the UX right,” just because companies are a little bit more design aware these days? What drove that to change? Why is it now? Kathy: I think there’s two things. First of all, they’ve failed, they invested millions of dollars in some sort of decision-support sort of application that may have millions of dollars and data integration work that we’ve done to build it and purchased a lot of really advanced software that can help users slice and dice the data and dive in and understand it. But they really took more of a data-centric approach rather than user-centric approach. They really didn’t take that extra step to say, “How does this person go through their normal day in their decision making. Where do they need this information in that decision making, and how should it be best presented so that they don’t have to do any cognitive task switching, that it just fits into how they go about making the decisions.” I think those failures are one big driver. But then I also think as organizations move up the analytics maturity curve and move from BI reports to predictive analytics to prescriptive analytics. Those prescriptive analytics are going to be much more pervasive across the organization. I think it’s this analytics maturity that’s also driving this need to put more design thinking into this creation of analytic products. Brian: Do you have any specific examples of a company that may have like, “Version one was X, and we didn’t get what we wanted. Version Y or X.2—we then went back and tried to fit this in better with that employee, and we saw some kind of change of result.” Can you cite any examples of how design allowed the data to actually be insightful and create a meaningful change? Kathy: One was a project that I was involved in at a large property and casualty insurance company. We were trying to alert our franchise insurance agents if they had somebody in their book of business who was likely to not renew. It was based on really good data science and model scores with different, clear […] that showed significant likelihood to a trait between them. It was originally deployed in a separate application with some general groupings of how likely they were to leave. The utilization of it was more of a curiosity at that point. There were some adopters, but not as broad as it would be hoped to really be able to substantially move the needle on this. As the design was redone and integrated into their overall CRM system—was legit on their CRM system that came up when they logged in in the morning, they didn’t have to go look to see, it was there for them. As we moved from groupings and scores, into one star to five stars, five star is they’re likely to go–you really need to work those. So just very simple little changes that drove a significant change in the utilization of that capability. Brian: Do you know what the blockers were such that it took a redesign? If someone was listening to this and they’re like, “I’m that person right now. We don’t want to go through the learning experience that your company went through.” What do you do to prevent that? Like, “Here are some roadblocks to watch out for.” Kathy: The thing is, these products are usually developed by folks within a data science group. We have the data, and we know this is a business problem, and we’ve done the analytics. That is expected but not sufficient. Then the next step is to really use just basic research techniques from consumer companies. Go out and watch your user group that you want to utilize this data or this analytics to improve the performance. See how they do their job, what tools do they use, where would this information be most relevant, how can it be presented in the context of their general activities, where it’s not a separate thing, where it’s integrated into the stuff that shows up of their performance evaluation. That’s the way to really avoid some of the deployments that may have really great data and science behind them, but don’t get user adoption that’s needed. Just take that extra step and really understanding the user and where this information is going to be most relevant for them. Brian: Do you think the appetite from executives and people that are at the top of the reporting chain for these things support the time and the effort to go out and do that type of research or to try to fit it in and not so much focus on “When are we releasing code? Show me some progress.” They want to see a glee. “Just show me some proof that these millions of dollars is doing something,” versus this kind of squishy. It can be squishy—at least in my experience with certain executives, especially qualitative stuff. “How many people did you talk to?” It’s like, “Oh, we talked to eight so far.” It’s like, “We have 10,000 employees.” It’s hard for certain ones to understand the value of qualitative research in these things. Do you have any experience or thoughts about that? Kathy: It can be squishy, but I think really analytics especially being deployed pervasively is maybe not a project but more of a transformation program and you have to take the transformation program perspective to it which includes such squishy things that change management and business process redesigned. Somebody using those analytics within their decision-making process is really where the organization gets value from. That code that gets released and deployed, it is an interim step. But it is not the final step to that organization getting value, maybe you’re just a data scientist of the company, trying to deploy a great app that could help a group of marketing folks better invest marketing, or supply chain folks better manage costs to suppliers. It doesn’t have to be this big concerted professional effort. One way to do that in a very agile, low-cost way is to find a couple of folks that seem to really jazzed about getting this and use them as some beta testers. Maybe you start out with just the information on a spreadsheet and say, “Hey, does this make sense just from this information that you would use?” And then have them walk you through, “Where would you use this information? How would it be best presented to you?” And then think about working within the constraints that you have of maybe you can’t change the screen for this digital marketing […] that somebody uses, but how can you make that information as accessible as possible, where it really is more of a push of information at the right time, as opposed to pull of information that a human being has to remember to go get when they’re in the process of executing their “day job”. Brian: You hit on some great stuff there. I talk about this to my list frequently which is understanding tasks and workflows and people’s day-to-day jobs that the goal is to fit your solution into their existing behavior as much as possible. It’s really hard to change behavior. “Oh, I got to go remember not to load this other screen and pull out those number of page two and paste this into the other screen and then hit enter and then it does some analytics.” These are the kind of stuff why people don’t bother to do it. It’s like, “Well, my guess is good enough. I’ve been doing this for 20 years. I’m this good. Whatever. No one’s going to know if I did that or not. They don’t know where that number came from.” They don’t want to do that. First of all, it’s to understand their pain, and then another good technique there is if you’re going to improve a process and we want people to use this tool in order to realize this new value, first of all, understand that benchmark of what their existing workflow, their playbook is and then ask them to do the same playbook using the new platform. This is a great way to uncover the things that you don’t know to ask about necessarily because if you first get that model of how they do it now, it’ll help elucidate those gaps that we can’t see. I just read an article, there is an example like, “Let’s imagine designing a new hotel room.” and you might take for granted that that hotel room has a bathroom. […] is talking about this. You’d be really surprised if you walked in and there was no bathroom because no one stated that was a requirement, and because everyone just took it for granted. It’s those kinds of things that you won’t see as a data scientist or product manager, perhaps because you don’t know what these front-line workers are necessarily doing all day. But I love that you talked about getting into the minds of what people are doing and fitting your solution into them. One problem I see is that in some places, it’s really hard to get access to customers. I think sometimes, this is more on enterprise companies that are selling a product that has a data-specific part of it, it can be hard to access them. You would think companies doing internal analytics that this would be easier. Do you think that comes from leadership? Do think that comes from the ground up? Any comments on how do you get access to the right people? What if they’re not being like, “Hey, I’m a call center. I get paid hourly by the number of calls I do, and you want me to go work on your new software?” How do you incentivize that so that they become a design partner which ultimately, is really where you want to go is to have a team of partners from subject matter experts, and product managers, the data science people, whoever it is that is going to affect the solution that comes out. What needs to change in order to incentivize that participation? It takes time to get these things right. Kathy: Yeah, for sure. We see that a lot just because as you noted, the breath of the organization or the different incentives and priorities that other groups might have. I hear companies all the time, senior leaders, we are going to be an analytics competitor, we’re going to do analytics. They think if they hire 200 Ph.D., data scientists that they are now an analytics company. I do think you’ve got to have somebody at a leadership role at least over the data science group say, “Look, this company gets value from this when we are making better decisions because of this analytics.” And those better decisions are going to come from people accessing the analytics. When they’re in their decision-making process, and really working more leader-to-leader. But that can’t be where it stops. You’ve got to create a peer relationship that all levels, number one. And then number two, if you get the leadership of the other group engaged early on—as this is a problem that they feel they have ownership in and that they are a co-creator with you, and starts at the leader level, and then works its way down—then, I think you’re going to have greater access and more ability to do that. Finally, in the absence of that, if you don’t get it right, then I would at least, as you’re deploying the new app, say, “Our next step is to watch the staff members use it and identify how to better integrate it.” So that at least you’re showing some leadership in your thinking that, “I know this is going to be a problem because I didn’t have access to them. I’m already teeing it up.” We’re going to have to come back and see how people are using it and how we can utilize some user experience and design thinking in the subsequent phase after […] is reached. Brian: Sure, sure. I think some of my clients in the past, they have to go through a failure first in order to decide that they don’t want to do it. We don’t want to do the build-first, design-second, process on the next one. There’s a certain level of convincing that can happen, and then at some point, you got to move forward because typically, IT or the business, they have been tasked with, “Deploy this new model and this software into the survey,” and they’re going to do that no matter what. They’re not going to stop and wait for design if that organization doesn’t have a matured design practice. So you might have to go through that. I would say, obviously, it’s always cheaper to adjust things in pixels, and pencils than it is to adjust it in working code. The more you can get in front of these decisions, and then form the engineering and the data science prior to deploying a large application, it’s a lot cheaper, and it’s a lot easier, and you don’t have all the change costs associated with that, both time, money, labor. No one likes to do it twice, most people want to work on new problems, they don’t want to redo the same ones. Engineers usually don’t like doing this, so getting in front of it is good. Kathy: I think what you’re touching on there is, maybe if you haven’t done your user design work, then you think about this release as a beta release. You plan this release, and you plan this app, and you manage your code knowing it’s going to change at some point, and knowing it’s going to change at some point, and knowing it’s going to change soon. The second thing is, key point is to decouple the analytics insight from the application. There is an analytic insight, whether it’s a number, or a recommendation, or some score, or something, is it is just loosely coupled to the delivery mechanism than it is easier from a code engineering perspective to have to it delivered in a different way. Brian: Right. No, that’s great. A part of that is that the attitude and culture of change and not falling in love with our first versions of stuff. To me, that has to be ingrained in both the engineering–all of the teams that are touching the product that the service that’s being put out there. A lot of companies say they’re doing agile. A lot of them are skipping one of the most important parts which is getting some customer representation involved, and actually, iterating and not just doing incremental design where you keep adding more, “Add another feature, add another data point,” that’s incremental design, that’s not iterating and changing as you get feedback. That’s something to watch out for as well. At some point, you need to get some stuff out there, and it costs to have come down obviously, to deploy software. It’s overall cheaper to get something out there quickly and to start getting feedback of it, but it’s very easy to no get the feedback and to let the working code feel like success. Until someone at the top is like, “Where is all the bang we’re supposed to get for this?” Kathy: I think the approach there is, get it deployed, so that’s great; it’s out there, and it’s working. But again, build into your deployment plan, use your feedback, and change from there. If you are not fully deployed, until after you have received this feedback and implemented the needed changes within the application, then I think that’s another way to prevent that falling in love with your first design. You know that this is just deployed so that people can use it, and that getting user feedback and making those needed changes is an expected part of the deployment process and is not a failure that the application was not sufficient. Brian: I think that should be part of any software development process to have a loop of test design, refine, deploy in the circle. For the most part, for larger applications, you’re never really done with it. It’s a process of getting better and figuring out the ROI like, “Have we hit the market? Is it worth spending more time and money on this?” but yeah, those are great insights. I’m curious in terms of the roles, I feel like someone that’s at the top of the responsibility chain here needs to have a healthy dose of skepticism about their own stuff, especially when it comes to prescriptive and predictive analytics or any service where it’s custom software they’re deploying into the organization have a healthy dose of skepticism about how great it really is. Maybe you deployed on time, bug-free, you can see the stats and all of these. But is that responsibility primarily falling into the data science realm because companies are investing in that area right now and so they become the de facto, what we would call a product manager more in the SaaS world? Did they become that and is that the right place for that responsibility to be? Kathy: I see that happen really, not necessarily through design and intention. But just because if a data scientist wants to take this great science that he’s discovered and make it accessible, in a lot of organization they have to do it, and so it’s put upon them when they’re probably not well prepared for that. I do think that that’s the problem. And then as a lot of different tool and capabilities make it easier for data scientist to deploy an application, if there’s not a really good user design construct within whatever application they’re deploying, in their data science application, then they need to be the one to take the extra step. As I said earlier, often times, the data scientist sees the world through data and algorithms and prediction. They get enamored with the complexity of the model and the strength of its prediction and not so much with how easy it is for somebody to use it. I think that’s probably a reorientation with training that should happen within data science groups around design,  best practices, and user experience design. They’re not going to evolve into great user experience designers, but they are going to be able to recognize something that’s really bad and perhaps ask for help and guide to make it better. Brian: Do you think that’ll stick then that that role will continue to live there? This person that needs to understand the business value that needs to be obtained, the user experience side of it and the technology side is trifecta there. Do you think that’ll stay in that data science world? Kathy: I don’t think so. I do think there will be a separation between the data application design and the creation of the data science that informs that […] in that application. I think as we talked about as some of these companies get more companies get more mature and need to have more pervasive deployment of data science insights, they are going to realize that they need to take a different approach. I often said that between data and analytics, I see the industry mature along the lines of software development. That design focus was not a big part of software development early on. I think it’s just going to have to happen within data science. Brian: I look at it this way, product owners can take many different titles. I have had all kinds of different clients, but ultimately, the box stops with everybody that’s working on it. But it helps to have someone that’s at that intersection of, “What do we need to do? What’s the overall picture of this?” and they understand the tech, the business, and the user experience side. Whatever the title of that person is, that role to me is really critical so that technology doesn’t run with everything. You have to have all three of those ingredients to deploy successfully, at least in my experience. It seems like that’s pretty critical to have that. Kathy: Yeah, for sure. A number of organizations that ask us about how do we show the value of our data science investments, how do we demonstrate our data science ROI. I think if more data science groups really looked at how their data science products were being consumed and started quantifying those, and then using some of the business metrics that are involved with that business process, whether it’s optimizing a spend or reducing average handle time at the call center, that would give them a great task to be able to validate their ROI to the organization, but I don’t see a lot of data science groups doing that. Brian: I’m curious, who ask that question? Is that the data scientist themselves or is it the business stakeholder who’s hiring the data scientist? What role asks that? Kathy: Usually, it’s a data science leader who has a large organization in large enterprise organizations. If you have a large organization with a lot of expensive resources, there is that continuing need to show the value that this organization brings to the overall company, especially when the output of that organization is not well understood or has not then a traditional part of that company. A lot of senior executives, C-Suite executives at large organizations, didn’t have data science when they were coming up through the ranks. This is something new that they don’t really understand, they know how much money they spend on it. A lot of data science organizations will need to demonstrate, “Here’s the hardline benefit that this company has gotten for investing in data science capabilities.” Brian: This blends nicely into my next question which is about obviously, AI, and machine learning are hot topics right now in technology. I hear this from people I talk to frequently which is, “Oh, the board knows we’re supposed to be doing some AI.” They’re asking me, “How many sensors do we have installed? Do we have digital transformation?” they ask these really high-end questions, and they want to go spend some money on it because they’re so afraid they’re going to miss the boat on that. From a design standpoint, we would say, “That smell, it reeks of possibly putting a cart before the horse.” The tool comes out, “We got to go buy this hammer because everyone else is buying this hammer. We have no idea what you hit with it, but we got to have it. We got to go spend some money on it.” How do you ensure that you don’t waste money? You want to invest in this. You don’t want to miss the boat. Maybe there’s potential for a project to deploy machine learning. It’s just pretty much what a lot of these companies are doing in terms of AI right now. How do you make sure that the desired investment from the business is actually going to have some ROI? They have heard this tool is hot. Kathy: It’s what I call the hype cycle mandate. Whatever is the new thing, it was a big data, it was AI and machine learning, with data sciences right, we have to have them, we have to tell the board we’re doing this. I think that is where executives earn their money, is being able to manage the message to the senior leaders who may not understand what’s needed and how you use it so that they can say, “Yes, we’re using it.” But the leadership than the executive leadership or the ones who has to go out and figure out where are the business problems and what is actually needed within our operating environment and our company to really deliver value from this capability. I will say, oftentimes, I see executives making the right call in that way. I have seen cases where folks have gone out and bought a lot of a software, and hardware and stuff that they have no idea of how they’re going to use, and that’s the shame. Brian: Do you think the right step there is to take on a small project, find a small win, show a small value and you can at least satisfy the, “Are we doing something?” “Yes, we’re doing some machine learning or whatever.” Do you think that’s the way it starts? Kathy: I am big just in any data […] investment, a big fan of used case-based development. Come up with a used case that requires this type of capability to execute it at the scale and precision that’s needed and then do some pilots to prove out the value, show the value, and then that then builds up a business case for the larger deployment that way. Yeah, I totally agree with that, Brian. Start with a used case, start small, understand, have an eye towards scaling as you start small, but get a small win, show that you’ve done it, the CEO can, in all honesty, say, “Yeah, we’re doing machine learning, and we’re going about it in a way that is physically sound but will also put us in a position to be able to compete with this capability in a quick amount of time.” Brian: That’s great. I think that I don’t know if I’ve said it, but this concept of falling in love with the problem and if you and your team, the people I work for you, or whoever it may be can fall in love with the problem and then weaponize your machine learning against that. That’s always a great thing, it’s to get everyone jazzed about the problem so that you know, especially if you can line it up with that technology not that the goal is to do that, but that’s when big wins happen to me, at least in my experience. This have been awesome. Do you have any advice, overall what will we talk about in terms of data product managers, data science managers, data science leaders, analytics leaders in terms of design, experience, what they should be looking for, going forward and just, in general, bringing more value to the customers. Is there a theme or something on your mind right now that needs to get mitigated to them? Kathy: My theme is a data science is about big complex data and a lot of technology and really advanced math, but they’re still human beings who have to use it. Don’t forget the humans. Focus in of how great this data set is that you created or how advanced this analytics technique that you’re using, but remember, the humans are your last line to realizing value from all of the stuff you’ve done before. Make sure you keep them in mind as you go through all of those other stuff as well. Brian: I think that’s great advice. And it sucks, those pesky humans. Kathy: I know, I know! They just get in the way of all those greatness! Brian: This is awesome. I have one last question for you and that’s have you ever surfed on a river? Kathy: I have not. Brian: I’m just curious. That came up in the webinar. I just saw this article on The Times about river surfing and I’m like, “I got to ask Kathy about this.” Kathy: Yeah. I’ve seen a lot of videos around that. I think it’s like this bore tide where the tidal action creates like this perfect wave that you can surf like forever. There’s some really good videos of folks doing that down in Brazil with some of the rivers that are draining out into the Amazon and other rivers that are draining out. It looks really awesome, but there’s this surf ranch in California that has this man-made wave. Kelly Slater, I think worked to create the engineering for this technology. That’s exactly what it looks like for those river-bore waves. But I’ve seen actually somebody in Munich surfing one of those […]. It’s on my bucket list, Brian. Brian: Sweet. I’m going to put a link to the surf camp, but where can we put some links to you? Where can people find you on the interwebs? Kathy: You can find me on LinkedIn, I am, Kathy Koontz. You can also find me at the International Institute for Analytics, it’s iianalytics.com, that’s our website. My LinkedIn name is customerjourneykoontz because that’s always been my passion is using data and analytics for customer journey. That’s where you can find me on LinkedIn. Brian: Cool. I will put those links in the show notes. This was super awesome. Thanks for coming and talking to me today. I’m sure people are going to enjoy listening to this. Thank you. Kathy: Thanks for having me, Brian. Have a good day. Brian: Alright, see you.

If you own a tablet or iPad, you've probably shopped for a case for it. And if you bought a case for it, did you ever run across beautiful leather cases that looked like books? If so, you and I have the same taste. Pad & Quill makes those luxurious cases. Our guest today is Brian Holmes, President, and owner of Pad & Quill. He started the business in 2010 with his wife, Kari. It was a desire to create exceptionally crafted luxury accessories (rather than profits) that motivated Holmes when he chose to start the business with a budget of just over $1,000. Pad and Quill is the tale of a shop formed with bookbinders, carpenters, a painter and a working mom coming together to create beautiful handmade iPad/iPhone cases, leather bags, and other dry goods. In this episode, we dive into his seven-year journey in ecommerce and discover what he's learned along the way. — Subscribe to The Unofficial Shopify Podcast via Email Subscribe to The Unofficial Shopify Podcast on iTunes Subscribe to The Unofficial Shopify Podcast on Stitcher Subscribe to The Unofficial Shopify Podcast via RSS Join The Unofficial Shopify Podcast Facebook Group Work with Kurt — Learn: How Pad & Quill got started Their direct approach to launching the brand Why you should embrace your passion The advantage of lifetime warranties How to Brian pitches the press The golden rule that governs Brian's marketing Why he moved from Magento to Shopify Plus And his advice for entrepreneurs Links Mentioned: PadAndQuill - Use coupon code BHAPPY10 to get 10% off any product Shopify Plus Free Guide I want to send you a sample chapter of Ecommerce Bootcamp, absolutely free. Tell me where to send your sample at ecommerce-bootcamp.com Transcript Kurt: Hello, and welcome back to The Unofficial Shopify Podcast. I'm your host, Kurt Elster, recording from Ethercycle headquarters; about 10 minutes from O'Hare Airport, if you're familiar. And today I'm talking to a wonderful, seven year-old eCommerce store owner. Well, the store is seven years old. The owner is not seven years old, I should say, I should be specific. But we've got this app called Crowdfunder, and it's not the easiest thing to install if you're not familiar with HTML. So people ask me, "Hey Kurt, can you install this thing for me?" And I say, "Yes, of course." And in doing that, I always get to check out some interesting stores. And in this case, I said, gee this seems ... I was looking at a store, it was called Pad & Quill, and I thought, this seems awfully familiar. So I went and I searched through my email, and sure enough, I had bought an iPad case from Pad & Quill in 2011. So I reached out, and I acted like, this seemed familiar because it is familiar; I used to have your case on my first gen iPad, and I would love to hear your story. This looks like a fascinating brand, they were in the process of moving to Shopify Plus. So I wanted to hear that story. So joining me today, is Brian Holmes, who is the President/Owner of Pad & Quill. He started in 2010 with his wife, Kari. Prior to running Pad & Quill, he's a Tradesman for over 16 years; we'll find out in what. He and Kari have been married for almost 27 years. Congratulations! It is so much easier to do this with a supportive family, and doing it with family helps. But Brian, thank you for joining us. Brian: Kurt, thank you for having us on. I appreciate it, having me on. My only question is, you've only boughten one case since 2011, Kurt. What's goin on? Kurt: (laughs) Let's see, I had- Brian: (laughs) Kurt: So for the longest time I just had the standard iPad case on there. And then one of my kids dropped it on the kitchen tile floor like two or three years ago, and we have not had an iPad since. Someday. Brian: Ah. Kurt: Someday I'll get around to buying another iPad. Brian: Yes. Well, you're right I'm not seven years old, I'm almost 50, but I've been doing this for seven years. That is correct. Kurt: Very good. Brian: Yeah. Kurt: For our listeners, what is Pad & Quill? Brian: So, Pad & Quill is a, we are a luxury accessory maker. So we design and craft luxury goods for tech and play. That's kinda what we like to say. They're durable goods. They're artisan made. Those four words are very important to us. We don't wanna make anything that is going to fade away within a year and breakdown, et cetera. So all of our products come with longer warranties, and we want them to be very well made, as far as what we call good art. So when we make a product, to us, it should be both beautiful and functional. Cause you can have a lot of products out there that are really nice to look at, but they don't last, or they're really, really functional, but they're just ugly. So what we're trying to do is create these kind of beautiful leather bags, iPad cases, MacBook cases, things like that, that are unique, but also provide a function, provide a utility and are durable. They last a long time. So that's kinda been our focus. We're a typical company, that when we started, we started one place, and ended up somewhere else. That's very common in startup stories, that the products you started with aren't always the products you end up making five years later. Kurt: So somewhere along your line you had to pivot. Going back to the beginning, how did you start Pad & Quill? Brian: Yeah. Kurt: And what was your first product? Brian: Yeah. So we started with $1,200, and I- Kurt: Very good. Brian: I painted my web designer's deck. Kurt: (laughs) Brian: She painted it ... She still works with us, she's still a consultant, Kathy. She made our website. She coded it on ... I can't even remember where it was coded, what platform; think it was WordPress. And we started an original ... She built it all, all I knew is that I had seen a product out in San Francisco by a company called DODOcase. Kurt: DODOcase, another Shopify store. Brian: Yeah, they made a wood and book case, and I saw what they were doing. And I thought, my word, we could do this, but we could more than what they're doing. We could do, like, MacBook cases, and iPhone cases, and all kinds of stuff. So that kinda was the inspiration. So we took the $1,200, I paid a photographer far less than he deserved; he still works with me today. Now he's making money, but he knew we didn't have a lot so he gave me a deal. We built four prototypes, and we put up the site, it was in late June of 2010, and just started reaching out to the press saying, "Hey, we've got these products. They're on pre-order, they'll deliver in six weeks." You know, basically, help us fund this, in many ways. Reached out to everyone you could think of. Some Wired, I was talking to Walt Mossberg at The Wall Street Journal, who turned me down, of course. Kurt: (laughs) Brian: But what happened was, we got picked up by a couple people. So Gadget Lab picked us up at Wired, and then someone at Gizmodo wrote about us; and it started to pick up. Sales started coming in, and what had happened is, it was really born of not an idea that I had been thinking about. It was born out of a passion of a product I already saw, that I liked, which was the iPad and then the book bindery style case. And it just, kinda like, came together one evening. I was just like, "Wait a minute, we could do this. And we could do this better." You know, cause typical entrepreneurs think they can always do it better. So I was thinking, we can do this better, or different. Kurt: So when you saw that original DODOcase- Brian: Yeah. Kurt: You saw an iPad, [inaudible 00:05:50] and you saw ... And at that time, that was very early; I don't know if that was the first gen or second gen iPad at that point. Brian: First gen, first gen. Kurt: First gen, okay. So very early on. When you first held an iPad, it did have kind of a magical quality to it, where it's like, it's just this big, solid glass display that I can poke at. Brian: Right. Kurt: And at that time, apps had really ... Like, a lot of them had these very novel interfaces; it was pretty exciting. Brian: It was. Kurt: Back six years ago, it seems like forever ago, and now we don't think twice about it. But it was exciting. And then you had seen, you're right, DODOcase in San Francisco who was using traditional book ... Really, I mean, they were making cases using just traditional book binding- Brian: Techniques, yeah. Kurt: Techniques. Brian: Yep. Kurt: And you're right, in the typical, the entrepreneurial mindset, you said, "I love both of these. Why can't I do this? Why not me?" Brian: Yeah. Kurt: That's often how businesses start. Why not me? Brian: Yeah, and it didn't have, necessarily, a logic behind it. It had an opportunity, is what was seen. But here's the interesting thing, what happened was, is that as Kari and I started working on these products, all of a sudden there was something that connected for both of us; which was, these devices by Apple are beautifully designed, made of aluminum and glass, steel, gorgeous, gorgeous finishes, but they lacked warmth. Kurt: Yeah, they're ultra modern, which- Brian: Yeah, they're ultra modern Kurt: Can often make them feel cold. Brian: Which is fine, but we love, and that's a huge passion of ours, is that we love traditional materials. So it wasn't just book bindery, and that's why after the first two years of selling I ... I mean, we shipped about 3,000 iPad cases out of my basement window- Kurt: Hmm Brian: In the first nine months of the business. So what we were doing is we were having a bindery in Minneapolis make the books. And we were having a CNC Maker make the wood, and they were putting it together for us. And then we would take it to our basement and do some finishing touches, and ship them. So, we continued our press push. We constantly were reaching out to the press, coming out with new products. So we were in a never-ending cycle of creating new things. So we created a book-style case for a MacBook Air, which was very unique to the market, and that got us a lot of pickup. We just kept working through all these different products. We did stuff for the Kindle, at that time. This again, back in 2010 when the Kindle was pretty popular. Yeah, and then after about 3,000 or 4,000 products, my wife was like, "I want the basement back." Kurt: (laughs) Brian: So that's pretty much what happened. So we found a spot in Northeast Minneapolis, which is kind of an arts community area of Minneapolis, in downtown. We found a little spot there, and that's where we've been since. So, we've been there since I think May of 2011. Kurt: Did you, at all, have a background in business, entrepreneurship, manufacturing? Did you have any unfair advantage or skills that you think played a part in the success? Or at least, did you just have so much hubris you said, "You know, I think I could do this and then figure it out." Brian: Yeah, it's interesting you said unfair, cause that's an interesting term; that it's unfair. I mean, I know what you mean, like did I have something that I could leverage, that other people wouldn't typically have. Here's the thing, I had been a painting contractor. So I had done wall painting, like, house painting. I'd done that for 16 years. We had four kids. I didn't wanna be a painter for the rest of my life. And then the last five years of my trades work, and this was my own company, and I had a couple guys working for me, we were pretty small. In the last five years, I got into more artistic designs. So I was doing a lot of artisan finishes on walls and design work. Kurt: Like French plaster, and that kinda thing. Brian: Yeah. Kurt: Okay. Brian: Exactly. Kurt: Cool. Brian: And Venetian plasters, all that stuff. And what was interesting was, I really enjoyed that part of it. I, then, got my four year degree. In those last five years, I got my four year degree at night, in Psychology, ironically. I had never finished my four year. I went and got it, never used it. Think I decided at the end of my Psychology degree that I couldn't listen to people that long. Kurt: (laughs) Brian: So I ended up not doing anything with that, but I took a job with a small tech startup; cause I wanted to get out of painting. I didn't feel like I was using my skills the way I wanted to. So I took a risk and jumped into a small startup, which failed. It failed in about 18 months. It was a tech startup with a guy here locally, he was an inventor. It went poorly. What happened was, is that, the idea for Pad & Quill, the idea for me ... Like, I didn't have any manufacturing background. But my time, those 18 months in that startup, taught me almost a Master's level about here's how you'd operationalize a product; here's all the things you would need to make a product happen. And so, I think Pad & Quill was kinda like, a culmination of multiple life experience; running a painting company, being part of a small startup. It just kinda all came together, and I thought I could do this, and here's how I'd do it. And as I've moved further away, I'm realizing I love design. You know, I have no background in actual design. I have no background in product design. It was very much self-taught, but it's following ... I'm good at reading what people want to see in the markets, and then kind of taking it and putting my own flavor to it. Kurt: Okay. So early on you started with, it starts with your passion, and it sounds like you have a passion for product design, which is great. Brian: Yeah. Kurt: It's so much easier to run a business when it's exciting to you, versus I'm just going to do this because it will sell. That's such a struggle; and some people have the discipline to do it. I think it just makes life harder. Brian: It does. Kurt: Certainly easier if you enjoy the product. So you created this ... How many products did you launch with, like, within the first 12 months? Brian: Two. Oh, in 12 months, probably- Kurt: So you started with two. Brian: Started with two, and then we added some Kindle, and then some MacBook products. So they- Kurt: And they're all variations on ... They're essentially the same product in different form factors. Brian: Exactly. It was the same product on the same theme. So then, in 2011, the iPad 2 came out, so that was a big lift for us; and we became a competitor to DODOcase. And there was another company, I believe called Portenzo, out there at the time; and Treegloo. There was a few other competitors doing what we were doing. But here's what happened, and this was a huge shift for us, in 2012, so I'm a good two years in, I was noticing that these books were falling apart. So what was happening is, these books were made in traditional book bindery techniques, using really good book material; but they were falling apart. And I was like, they look beautiful, but they don't last. And I was realizing this is a ... You know, people love our product, they love our design, but I don't love that they don't last. And if you're cynical you could say, well that just means people will come back and buy another one. And my comment to that is, no, it means people will be disaffected by your brand. Kurt: I agree. Brian: They'll say your stuff isn't gonna last. Kurt: The brands I've seen where the product is incredibly durable, where they're comfortable in giving, like, really outlandish warranties on it because it's so durable; those are the brands where people, they don't have to worry about it falling apart and someone buying another one because people like it so much, they recommend it and they often will buy multiples. Brian: Right. Kurt: A good example would be, oh there's a Reddit group, I think, called Buy It For Life, where people just recommend products that they think will last a lifetime. Brian: Oh, funny. Kurt: Yeah. Off the top of my head ... And some are leather goods. But often times we see Saddleback Leather's bags mentioned, Beltman leather gun belts, which a gun belt- Brian: Okay. Kurt: Just turns out, it's a very stiff belt. Brian: Yeah. Kurt: I'm wearing one right now; it's a client. Brian: (laughs) Kurt: Yeah, those are great. Brian: Yeah. Kurt: What's the other one? Another good example. Oh, we use Everest bands as an example; they make watch straps for Rolex, but out of this unreal durable rubber. We had a review where someone said that they run it through an autoclave on a weekly basis, and the thing's fine. Brian: Yeah, yeah. Kurt: And it doesn't hurt their sales, people buy multiple products. So, no, I'm with you. Brian: And so what happened is, in 2011, I said that's it. It was late 2011, I said we have gotta shift to leather. We've just gotta shift, cause this is not a sustainable ... We're doing the eCommerce thing well. You know, by the way, we're not buying any ads from Google for the first three years. We are existing purely on reaching out to the press with new products. Any press that'll listen to us, and you know, if you have something kind of sexy, they'll write about it. Kurt: So that's a- Brian: And that would bring in sales. Kurt: Alright, that is an excellent point. But it's so difficult. Brian: Mm-hmm (affirmative) Kurt: Early on, the only marketing you were doing were two things, PR and these continuous launch cycles. Brian: Yep. Kurt: So you're coming out. You end up, kinda trapped in a thing where you're always launching new products; and that could be good, or it can be a struggle. Brian: Yeah, it's a little of both. Kurt: It's a little of both. Brian: Yeah. Kurt: But it gives you a reason to keep reaching out to the press. And once, I think, you've gotten over that initial hurdle where they're interested in you, and you start developing relationships, it helps. Brian: Right. Kurt: But what do you think goes into, like, what makes a good press pitch? Cause this is so difficult. Brian: Yeah. This is a good question. This is a good question. Two things, be real. You know, don't sit there and try to ... Don't talk to a press person like you're not pitching them; you are pitching them. But, with that said, be brief. Okay. Brevity is the soul of wit, is a famous saying. I love that saying; it's very true. Be very brief in your communication. Send a big fat image to the press. Make sure you're taking some photography of your product that looks nice. Pay a photographer friend, if you're just starting out, to maybe give you a hand. Because good imagery goes a long ways in a writer's mind, because in the end, what they're looking for is, are you offering me something my readers would care about? Is this interesting to my readers? Cause if it's interesting, yeah I'll write about it. I'll mention it. I'll tweet about it. So, be brief, be very real, just be open. Say, "Hey we're just starting out. We're a family business." That's what we used to say. Our pitch was, "Hey this is Brian from Pad & Quill. We're a small family business here, in Minneapolis. We've got these beautiful new iPad cases we're just releasing. Here's some images. Thanks for any considerations, if you'd cover us." I still say that same email, what I just said to you just now, today. Kurt: Hmm. Brian: I still email that exact same way, today, when I'm emailing Wired. Kurt: I'm sure it works. Brian: Yeah. Kurt: I am on the receiving end of so many awful pitch emails, and outreach emails. Brian: Yeah. Kurt: That when one comes through where it's like, alright, it's not a giant wall of text. It's concise, it's to the point, it tells me what the advantage to me and my audience is, and it's not trying to trick me, or in any way mislead me. It's saying, hey, this is who I am, this is what I can offer you or your audience, and if you wanna know more information, here's next ups. Brian: Right. Kurt: And it's genuine and real. Brian: It is, and I think that, that has a huge benefit. Again, it's that whole idea of, are you serving people? So I come from the place of serving my customers. I serve my customers, then I'll be able to create an income for myself and my family. If I serve my vendors by creating a customer base, then my vendors will be loyal to me, and continue to make products on time; because they know that I have a loyal customer base. If I'm going to the press, am I operating from a place of service? How am I serving the press person? Not using, serving. There's a huge difference between those two. Because in serving someone, you're saying, how can I help your column to be more interesting? Would this be a way to do it? And the press person may say, "No, this is not of interest to me right now," and that's fine. But it's better to come from that perspective, more of humility, than to come from, "You know, you should cover this. We have a lot of customers. You should cover our products, they last forever." Kurt: (laughs) Brian: That doesn't go very far with the press. It's funny, I wanna finish that pivot because you brought up a company I wanna kinda tie you into. So, in 2012, we wanted to move to leather goods. I wanted to get into more leather cases. I wanted to make an iPhone case. We were making them, at the time, out of traditional book bindery material. They'd last, honestly, about nine months. We were charging, like, $50, and I'm thinking, that's too much money for somethin that falls apart. You know? How do we do this? So I started reaching out to leather manufacturing companies, and I came across a company called Saddleback Leather Company. Kurt: Very good. Brian: And I hit up their PR guy, and I said, "Hey, I wanna do manufacturing." And they said no. And on the third time, I kept coming back, they gave in. So, all of our, the majority, I shouldn't say all, but the majority of our leather goods are made by Saddleback's manufacturing. So, Dave Munson's a good friend of mine, that developed over the last four years from all this. So it's funny you brought up Saddleback, cause I was like, "Yep, that's our people." Kurt: Right. Brian: And that's the thing is that, what I knew I needed, I don't wanna make just a beautiful item, I have to make something that lasts and is durable. And we have been so thrilled to be working with Saddleback's team. They have a plant in Mexico that we use, and it's just phenomenal, they treat their people really well. I've been there, I've seen what they do. It's just a fantastic company to work with. Yeah, so that's who we use for all our leather. So that happened in 2012, and we launched this little leather wallet case with them; and it was partly made here, actually. Some of it was made here, some of it was made in Mexico. It was all brought to St. Paul and assembled, and that took off in 2012. We had a huge, huge sales cycle, our biggest year ever in 2012; at that time. Kurt: This is just a leather wallet? This was your- Brian: Yeah, it was basically, like, a leather wallet case with our wood frame. We had our unique wood frame attached to all leather, so it was really durable. And that started in 2012, it was featured in the New York Times in 2013. We had a big year in 2013 and 14 because of it. Yeah, iPhone cases were real good to us in the first three years. And then, in 2013, 14 is when we started developing our lifestyle line. That's when we started bringing in bags, we started creating ... Our first bag launch was in late 2013. Kurt: I'm admiring your Classic Journeyman leather wallet on your website. I gotta- Brian: Oh yeah. Kurt: Pick up one of these. Oh, and it even comes in different colors. Brian: Oh yeah. Kurt: Oh that chest- Brian: Yeah, if that Chestnut looks familiar, you've seen it at Saddleback Leather. And I have no problem promoting Saddleback, cause honestly, it's a great company. Dave and I are different designer styles, definitely, but he makes great bags. He makes great bags. Kurt: Yeah, I see right on here. It says, "30 day, money back promise, and 10 year leather guarantee." Brian: Yeah. Kurt: So tell me, was it scary to offer this kind of warranty? Brian: Yeah. Yeah, it always is. It was funny cause I had a guy from inc.com, I was doing an interview two years ago, and he asked me, "Why not lifetime warranty? Why 25?" And I thought, it was a good question, and I thought, because lifetime is so cliched; everyone says lifetime. But by putting 25 years, what I'm trying to say is, it's gonna last two and half decades. You're gonna get a lot of use out of it. And by the time they last two and half decades, you're probably gonna want another one anyhow. You know, we'll have new stuff by then. Kurt: Right. Brian: I think we put a year around it because it gives it a definitive, like, wow this is built to really last. Yes, it's built to last. Is it scary? Yeah, it is, because you do have things break. Hardware breaks, stitching fails; it happens from time to time. We repair it and take care of it, but yeah. Put it this way, I don't feel nervous about the quality we're putting out, though. Does that make sense? We got a lot of confidence behind what we're doing. Kurt: Right, if you're confident in it, it shouldn't be scary. Brian: Yeah. Kurt: If you believe in your product, you shouldn't be afraid of it. Brian: Yeah. Kurt: I mean, really, your only fear is will people abuse it? And you're always gonna get someone who does. Brian: Yeah. I mean, we started coming out with ... We found a book bindery material that lasts more than six months. We found one that lasts for years. Now, we put a one year warranty on it, but it'll last. We tell customers, it's a one year warranty, but you'll have it for years. Because we found this really tough buckram, that's really beautiful; it's used in the library of Congress. That's what we wrap our iPad cases in. Kurt: Hmm. Brian: So for us, it's all about the materials. Will they last? So I guess I'm ... No, to answer the question, I'm not too worried because we're trying to use the materials that will last. Kurt: Right. Brian: Yeah. Kurt: So you've got, you're in the process ... Well, probably by the time this airs, maybe, your Shopify store will have launched. Brian: Hard to say. Kurt: Hard to say. Maybe it has, maybe it hasn't. Brian: We actually see a delay coming because of, and you can edit this out if you want, or keep it in, I don't care. We may be unable to switch for at least a month or two because of a new iPad coming out in a few weeks. Kurt: (laughs) Cool. Brian: Because of that, we're gonna have so much lift on the site, we are very hesitant to shift platforms until the sales calm down. Kurt: So what platform are you on now? Brian: Magento. Kurt: And you're switching to Shopify Plus. Tell me- Brian: Thank God. Kurt: (laughs) Alright, so what happened? Why are you doing that? Brian: We were told early on, I had talked to a consulting group, and they said, "Oh, you should be on Magento, it's scalable, you can customize." All true, all true. I call Magento, kinda like, the PC, and Shopify is kinda like a Mac. Kurt: Hmm. Brian: That's how I see the two. I mean, you can do a lot of customization on Shopify, but it's very plug and play friendly. And for the entrepreneur who wants to start a company, the last thing you want, is to be figuring out how many hours you can pay a $150 an hour developer. Because if you have a Magento site, that's what you're doing all the time. You're paying a developer, constantly, for the smallest changes. Kurt: Right. Brian: Whereas, on Shopify, you have app store, you have plugins. We're, of course, with what we're doing, we're paying developers to help us with small projects here and there. But for the most part, it's really a lot easier to assemble a Shopify site. Magento is definitely customizable, but boy, you better have Magento Pro engineers, who are doing all your coding. They have to do all your maintenance, manage all your plugins. If you have conflicts with your plugins, that's up to you to figure it out. Shopify does all that for you. They do that thinking for you. Kurt: Right. Brian: That's something that is a huge benefit to us. We were debating Magento 2.0, last year, or Shopify, and came down on Shopify. Kurt: What was the straw that broke the camel's back, where you said, alright it's time to make the switch? Cause it is not an easy task to change platforms when you've got an existing, running business. Brian: It's not. I think, a couple things. One, we designed this site about three to four years ago, it was starting to feel three to four years old. The current site at padandquill.com if you go there right now, it's three to four years old design. And we're kinda, you know what, we need to make this a little cleaner. We've moved more into a luxury lifestyle brand. We wanna even display more large imagery about our lifestyle and what we do, and what we love. So, that was kinda the impetus to go, okay, what platform do we want it? We were thinking, originally, Magento 2.0, and then we started considering just how much technical work was required; and that's when we reached out to Shopify, and it was a pretty easy sale. Cause we were like, "Sounds good!" I mean, we'd pay a certain fee. We're on Shopify, what's it called? Shopify Plus? Kurt: Shopify Plus. Brian: Yeah, so we're paying a fee, but that's like, I already pay that fee with a developer right now to guarantee 99.9% uptime. Kurt: Right, yeah. Brian: I have to pay someone that right now. Kurt: Yeah. The thing you're trading ... It's interesting to sell, trying to explain the benefits and the value proposition of Shopify Plus to an existing Shopify store owner. They're like, "Alright." You have to figure out, like, what's the problem you're facing, and the Shopify Plus will solve it. Versus when someone is on Magento and they're looking at switching and you go, well you don't worry about, you know, for one flat fee, someone else is gonna manage and you never worry about hosting uptime, updates, security, all of that goes away, and support. Brian: Right. Kurt: And it just becomes a no brainer. Brian: And we've had security issues, just being open with you. We've had some security issues pop up because of outdated plugins. Kurt: Right, and those- Brian: And all kinds of stuff. And it was, like, an outdated plugin in a blog. Kurt: Yeah. Brian: On our Magento site. And someone had gotten in through the back door, and we caught it, fixed it. But it was one of these things where we're like, okay Shopify does all that for us. Kurt: Yeah. I have, literally, never seen a security vulnerability like that happen on Shopify. Whereas, previously we did a lot of WordPress development work, and that was like a constant, constant battle trying to keep those things locked down. Brian: Right. That's the last thing you need to be worrying about. Right? Kurt: Yeah, that's just such an unnecessary- Brian: I mean, that's the last thing. When you're designing products, you're trying to ... Cause what am I? I'm a designer. I'm a salesman. I'm a community developer. Like, we have a family of customers, that's where our focus needs to be. You know? Not on security issues on the site. Cause 98% of our revenue comes from eCommerce, our store. Kurt: Hmm. That's excellent. Brian: Yeah, we are not in wholesale. We're very much like Saddleback; we're eCommerce only. Kurt: So, we're coming to the end of our time together. You have had a long, successful, and wonderful journey over the last seven years. What are some of the things you've learned, that you would go back tell yourself when you were starting out? Brian: Oh, that's a great question. Did I tell you to ask me that question? That's a good one. Kurt: (laughs) No, no. You said what three things have you learned building a brand? Brian: Yeah. I would say this, if you have a product you're making that's starting to sell, and it's selling pretty well and you love making that product, and other products like it ... Whatever the field is, whatever you do, be very careful to not listen to consultants too much. There is wisdom in a host of counselors, there really is. But in the end, your passion has to be from you about what you wanna sell and bring to your customers. So be careful how much you listen to consult ... I did a lot of consultant listening early on, that I wouldn't do now. I would just be who I am. And the more that Kari and I have just been who we are as a couple in this business, the more success we've seen. The more we have followed what other people have told us, "Well, you're getting big now. You really need to think about strategic changes." Those are big disasters. Not disasters, that's a heavy word. Those have not been fruitful. So, be who you are. To the degree that you can do something you love, is a huge blessing, it really is. Not everyone gets that opportunity. Like I said, I was painting for 17 years. I was thankful I was able to bring in an income, but I didn't really enjoy painting. So, where you can match a passion or a desire to income, it's awesome. But it's not ... I don't think it's something you can always do. Does that make sense? Kurt: No, absolutely. Brian: I'm not trying to paint a rosy picture here, because it's pretty hard to do that. Kurt: I think it comes down to having an authentic voice, being true to yourself, being true to your brand. Brian: Yep. Kurt: The hard part is figuring out what that voice and brand are, and then letting that show through. Every time I've been scared to include more of my personality in my marketing and my work, it has always paid off. You know, people like having that authentic voice; and that's what part of the podcast is. Brian: Right. Kurt: I'm myself on the show, and then by the time someone says, "Hey Kurt, could we work together on this?" And we get on the phone, they go, "I feel like I already know you." Yeah, because the whole time, I've been myself, and that's so important. Brian: Right. That is so important. It is so important. Plus, you'll just be happier with yourself, at the end of the day. Cause you've been true to yourself, even if the business doesn't work out. You just don't guarantee that any of these businesses will succeed, right? Kurt: No, absolutely not. It's always a risk. Brian: But in the end of day, if they fail, were you yourself? Were you trying to be yourself? Yeah. Kurt: So, Brian- Brian: A good entrepreneur gets back up and says, "Okay, what can I do next?" Kurt: Yeah, you learn from it, you move on. Brian: Yep. Kurt: And try the next thing. Brian: Yep. Kurt: So Brian, where can people go to learn more about you? Brian: Yeah, so, the best place to learn about us is at www.padandquill.com. So that's our website, click on About Us if you wanna see our story in more detail; that's at the bottom of the page, About Us. You'll see a picture of Kari and I, and there's kind of our story, and kinda what drives us, our passion is very interesting as well. Also, coupon code. We have a coupon code for your listeners. Kurt: Wonderful. Brian: So bhappy. So the letter B, and then happy, H-A-P-P-Y, number 10, just one zero. That's 10% off anything, any product, including bags, leather bags as well. Kurt: And they are beautiful bags. 10%. Brian: Thank you! Thank you. Kurt: Alright, I wrote that down, I will include it in the show notes for folks. Brian: Cool. Kurt: Brian, thank you for everything. I appreciate it. Brian: Yeah, Kurt, thanks so much for having us on, and wish you best with your success on your podcast. Kurt: Thank you. That's all for us today at The Unofficial Shopify Podcast, and I'd love to hear your thoughts on this episode. So please, join our Facebook group, The Unofficial Shopify Podcast Insiders, and let me know. Or sign up for my newsletter, kurtelster.com, shoot me an email. Either way, you'll be notified whenever a new episode goes live. And of course, if you'd like to work with me on your next Shopify project, you can apply at Ethercycle. Com. As always, thanks for listening, and we'll be back next week.

Welcome to Beyond Prisons: a new podcast examining incarceration in America through an abolitionist lens.  In our first episode, hosts Kim Wilson and Brian Sonenstein introduce the idea behind the podcast, dissect and critique the current conversation around prison reform, and discuss the need for a broader vision for justice that should guide those efforts. What is prison abolition and what would it mean to live in a world without prisons? What's missing from current efforts to reform the criminal justice system? What kind of topics will this podcast cover? We tackle these questions and more in our first episode. Going forward, we will conduct interviews and delve much deeper into the various issues we touch upon in this first episode. So, stay tuned! -- Follow us on Twitter: @Beyond_Prison @phillyprof03 @bsonenstein Music & Production: Jared Ware -- Transcript Brian: Hello everybody and welcome to the first episode of Beyond Prisons. I am one of your hosts Brian Sonenstein and I’m joined by my co-host Kim Wilson. How ya doing, Kim? Kim: I’m doing well. Hi Brian, how’s it going? Brian: It’s going alright. I’m excited to be here. I’m glad we’re getting this off the ground. Kim: Yeah, me too. Brian: So what Kim and I are trying to do is something a little bit different. Oh, my dogs are barking in the background. (laughs) Kim: We’re gonna have dogs, we’re gonna have cats. We might have you know, who knows what else is going to show up so I say let’s just roll with it. Brian: I know, it’s fine. Kim and I decided to start this podcast to talk about the issue of prison reform and mass incarceration, and offer some different perspectives than a lot of the things you hear going on in the news right now. So I thought we could introduce ourselves a little bit. Kim, why don’t you go first? Kim: Ok, well, I’ll tell you a little bit about what my motivations were, and I think that will be a nice segway into my intro. But the motivating factor behind me getting on board with this podcast really stems from a place of frustration. I’m frustrated with the policy choices around mass incarceration, around prison specifically, and I’m seeing so many things that are impacting communities that I care about and that many people that I know live in, and I feel like we could be doing something better and so I’m coming at it from that perspective. That said, on a personal level, I’m the mother of two incarcerated men who are serving life in prison without the possibility of parole or at least that was their sentence. My professional and academic interests in incarceration began long before either of them had any encounter with the criminal justice system and I’m thinking of that in a broad sense particularly when we talk about schools and school to prison pipeline, which I’m sure we’re gonna spend quite a bit of time talking about in later episodes. And then I’m also coming at this as an activist who started out very much on board with prison reform and the prison reform movement if you want to call it that, and quickly evolved from that perspective to one of being strongly committed to prison abolition. So that’s a little bit about me, where I’m coming from, and what I’m hoping that this podcast is going to be about. What about you, Brian? Brian: Well, so I am a journalist. I’ve been writing about incarceration and the criminal justice system for about five years now. My work has primarily been to address these issues from the perspective of the people who are most directly impacted by it and that’s how I actually got to know you Kim. I’m also deeply interested in the issue of prison abolition after having been an activist myself for a number of years on a number of issues from drug policy to whistleblowing. I’ve seen a lot of people have interactions with the system and none of them have been good, including friends of mine. I grew up in sort of a blue collar, very small town in New England and saw a lot of people who fell into drugs and other problems, wind up in the system and it just destroyed not only their lives but the lives of their families and friends, and so I just had a growing interest in this. I’m very interested in the topic of reform, I’m also interested in critiquing reform, which is something we talk a lot about here. And we’re also going to try to break away from sort of this large statistical view of incarceration where we’re focusing on numbers. What we’re gonna try to do is bring perspectives from the people who are involved and use those to sort of guide our arguments about what the criminal justice system should be like. So why don’t we talk about like the major narrative around mass incarceration, you know maybe we can start by just critiquing that there. So I don’t know, when you think about mass incarceration , what are some things that jump out to you, like what are the things you know about it? Kim: You know, coming at this from several different points of view and those things have deeply informed where I am today regarding mass incarceration. I think that’s an important thing to talk about because, again, as someone who was trained as a policy analyst, the policy perspective or that school of thought can really be distilled in terms of cost-benefit analysis and I want, as you pointed out, for us to move beyond statistics and to think about the real issues, to dig down deep into the racialized nature of mass incarceration, which is one of the things that jumps out to me. I mean, I think it’s important to address the numbers and to account for those and also to explain what those numbers mean in the context of people’s lives in the context of communities. How do those numbers translate into problems for the people who are behind the numbers, right? So I think that first and foremost addressing the racialized nature of mass incarceration and more broadly what we refer to as the prison industrial complex. That’s one of the main things that I want to talk about and I don’t feel is actually discussed enough in public policy circles. Now, that said, I think that there are public policy institutions that are doing this kind of research and that are publishing reports and white papers and what have you that do address the racialized nature of mass incarceration. But this doesn’t actually seem to make it into the spaces where policy makers are making decisions and that gap right there really frustrates me and it’s something that has frustrated me for a really long time. We know, for example, that Black people are disproportionately represented in the system and what does that mean?  You know, what does that mean in terms of communities? And I want to talk about that and to explore that. We know, for example, that in terms of placing this in a global context that the U.S. has one of the largest prison populations in the world. So what does that mean you know and what does that look like on the ground and what does that mean in the context of the politics of today? Because I don’t think that we can really launch a podcast in 2017 and not talk about the current (laughs) political situation in this country. Brian: Right. Kim: If that’s not a source of frustration for people, I don’t know what is and it’s certainly a major source of frustration for me. Then there is the gender component of mass incarceration. We tend to talk about men who are incarcerated and particularly black men. To neglect an oversight of talking about women and how those numbers have grown exponentially over the last decade and a half, and I think that’s an important piece that needs to be addressed as well. So there’s a lot of stuff that I’m thinking about when I’m thinking about mass incarceration. I think that that this is a good place to start. I’m also thinking about mass incarceration in broader terms and this goes to the title of our podcast as well, Beyond Prisons. I want us to imagine what that means. What does it mean to see something beyond prisons? Can we imagine a world not only without prisons but what are some of the creative solutions that we can come up with through these conversations that are going to be I would say not only realistic but that are necessary in light of the fact that we have, what, over six million people under correctional supervision in this country with about two million of those incarcerated? So when we think about, when I’m thinking about incarceration in this country, I’m thinking about it in really broad terms. I’m thinking of policing. I’m thinking of surveillance. I’m thinking of all the various ways, the mechanisms that are used to control certain populations in this country particularly marginalized groups in this country. What about you? Brian: Yeah, absolutely, and I think that on a very basic level, one of the things that I want to do is talk about what we as Americans by and large think prisons do, who goes there, what happens there, and this includes even through the lens of the reform movement. But as activists, when we’re thinking about policy that we could be implementing and if we’re thinking about what comes next after prison, I think one of the most important things that we can do is have conversations that could lead to a cultural shift among people that will lay a stronger foundation for these policies, and I think we can get there. As we know, prisons and the system in general are largely out of the public view. Attempts to, I know this as a journalist and you know this as both a scholar and a parent, but any attempts to get more information about the system or to question actions by officials, you get the silent treatment or worse. I think in order to really lay the groundwork for a lot of this policy, we need to have conversations and clear some things out about punishment, and about crime, and about safety and the role of prisons in all of this, right? And I think that there is this idea that people are criminals instead of people that do things that are against the law or maybe have low moments. I think there’s this idea that when you go away to prison,  you deserve harsh treatment and certain things as punishment and there’s no thought that these people are eventually going to get out. They’re going to have to reintegrate into society under even more difficult situations than the average person trying to get a job out there today, when you have this scarlet letter of a conviction hanging over you. What I hope that we can do in addition to all the things that you said that I totally agree with. In addition to getting into the various issues that go on in prison, and at the front end and back end, before people go in and after, I just really want to challenge our assumptions, and I want us to really think about the myriad costs that are associated with decisions that we make with punishment. And even on just a basic and theoretical level, we talk about prison sentences, right. We talk about sentencing reform, but we attach arbitrary years on prison sentences because I mean there really is no science behind a lot of this and it’s just interesting to think a lot of times—I hear people on the left and liberals are always talking about how oh, the Republicans are so anti-science. Well, the truth is that as a society, we have this looming system that is very pseudo-scientific and very anti-scientific in a lot of ways. And so these are the ideas and little things that we want to chip away at. We’re gonna bring guests on to talk about these things and a lot of the things that you and I are going to chat about today. We’re gonna gloss over a lot of things, we’re gonna mention a lot of things, but trust that in coming episodes, we will dig into these issues deeper. So, what else? What else should we talk about here? Kim: Yeah, I mean playing off of those points that you just made about prison, one of the things that I’ve been thinking about as I was preparing for this episode today was something that Angela Davis writes about in ‘Are Prisons Obsolete?’  And she says, ‘stop thinking of prisons as inevitable, ‘ right? We think of the prison as this natural thing, and that we can’t imagine life without it. And I think that our name again captures that, but our approach to what we’re attempting to do with these conversations is to think about what is life without a prison. It’s not some Utopian ideal. It’s not politically naïve to talk about a world without prisons, a society without prisons, and the difficulty that I’ve encountered in my work with people, including a lot of liberals. It’s mostly liberals who I’ve been working with around issues of prison abolition, that any time I say, ‘Ok, imagine a world without prisons? What does that society look like?’ The first thing I hear is, no, no, no, you can’t possibly mean you want to get rid of prisons. And again, this really is super, super frustrating because it’s not even... I’m giving you a magic wand. You can make the world whatever you want it to be, right? It’s like, it’s a theoretical exercise in a lot of ways. And people don’t even want to imagine that world. Brian: Why do you think that is? Like why do you think people—I have my own thoughts on this, obviously, but I’m curious of your thoughts on why people are resistant to the idea of having that radical imagination. Kim: Well I think a lot of people are afraid, right. I think that there’s a lot of fear that they watch these television shows, they see things depicted in the media and presented a certain way, and their fantasy about what someone in prison looks like or is capable of is informed by these things. They don’t necessarily—even if they have an experience with someone who’s been to prison, they tend to have this wall up, like okay, I like the idea of improving conditions for people in prison, but what are you talking about? This is going a little too far. You can’t really be talking about getting rid of prisons. And, I’m like actually I am. So institutions where we put people in cages for long periods of time without any consideration as to what that is doing to someone. It’s a problem. It’s problematic. We need to have, I’m fond of saying, the courage, the backbone, like we need strong backs to be able to say this is wrong, right? And how do we disrupt this system? How do we change this system? How can we make something that is different from what we have now, right? Not just substituting and moving this around or you know they say rearranging the deck chairs on the Titanic, right? You know, just a couple of days ago, de Blasio, Mayor de Blasio of New York, announced that they’re closing down Rikers and that’s great, and I’m cheering for the fact because Rikers was a really shitty place. It was a horrible place by all accounts and it needed to be closed. However, what he’s proposing is setting up new prisons. So for me, and this is where I have to depart with the reform movement: Substitutes for prison, including other prisons, doesn’t really help the issue. It doesn’t address the social, the economic, the political problems that have created the issues that we have regarding mass incarceration, and I think until we get to that, until we get to that point where we can, I mean, good grief, have a conversation about what a world without prisons could look like. And to move people just a tiny little bit to say ‘ok, what does transforming this society mean? How do we deal with really scary things? Okay, so someone’s committed murder or someone’s being raped. These are horrible things and how do we address the victim’s legitimate concerns here while also addressing what is happening in terms of incarceration that we know doesn’t actually act as a deterrent, right? It doesn’t work, so what do we do about this? We need a better way to approach this and I’m thinking of this podcast and our conversations as a way to explore various approaches to what that landscape would look like. I’m looking at it also in terms of how do we challenge white supremacy as part of this project? I see a lot of talk about prisons and carcerality that want to leave out the race component. And that’s one of the hang-ups I think that we have and that we confront, particularly in the terms of policy making and policy choices that are being made because these policies around prison are meant to appear race neutral, and they’re not. We need to have not only a language but a process by which we can assess, analyze, and understand what racialized carceral system is, and what do we do about that. Brian: I agree. I completely agree. And I think that there is a lot of danger in compartmentalizing reform efforts instead of taking these broader approaches like abolition. My head is spinning. There’s so many things I want to say in response to what you just said. I mean one thing I want to say is that I think that for people who don’t really know what prison abolition is, they’ve never heard of it, or maybe they have somewhat of an idea. I think that one of the helpful ways to think about this too is that there is not going to be a one-size-fits-all solution to prisons, much the same way that much the one-size-fits-all of prisons doesn’t work for the justice system. I think when we’re talking about getting rid of prisons, like you said, we’re not talking about replacing it with a different kind of prison. I really resent a lot of this talk about looking over to Sweden and see how awesome it is to be a prisoner in Sweden. I think that’s totally the wrong way to look at prisons. It’s also a hard conversation, I think, and I wonder if you ever butt up against this, Kim. The needs and the problems are so bad for people who are incarcerated that the needs are very immediate, right? So I’m not sitting here saying we shouldn’t support these reform efforts that look to increase the quality of life of prisoners, because we need to help people right now. But we can’t do that at the expense of a broader vision. I see a lot in these reform efforts of reducing or showing greater leniency toward low level non-violent offenders, but at the same time, we are going to increase penalties and introduce new penalties for violent offenders or for other drug crimes. They talked about introducing a new Fentanyl mandatory minimum sentence in the last criminal justice reform bill. It probably will be added to this one, I assume, with Republicans being in control of legislature. Another thing that I want to say and I’m jumping around a little bit here, but I’m just thinking about your comments, is a lot of times what we see in reform is euphemism, to make it look like things are changing or to modestly or slightly tweak a prisoner’s experience. But the abuse and the fundamental issue of why a certain thing in prison is bad remains the same. So, for example, with solitary confinement, we say that solitary confinement is torture and I think that it is pretty widely accepted now that solitary confinement is torture. And at the same time, the reforms that we get are two extra hours out of your cell per week, and reformers call that a victory. Or only certain groups of people are not allowed to go into solitary confinement, or they opened a new housing unit that is basically solitary confinement in everything but name. So it’s really tricky and that’s another reason why I think it’s important to consider abolition and to take it seriously because a lot of these problems. We are at where we are today because a lot of these politicians have been kicking the can on these issues ever since we had prisons. I mean, Attica, the reform efforts followed Attica. Rebellions have been going on for years and years and years. Things haven’t gotten materially better. I think when we think about abolition, another thing to think about like you were saying, is how do we think about somebody who’s committed an act of murder, an act of rape? How do we think about justice? But it’s also that the prison and the system that we have set up does nothing to sort of head off these things from happening by changing the material conditions and environments, social contexts and racial contexts like you were talking about, that people live in, that limit their options and push them in or silo their paths in life. So it’s not just what can we do differently when someone commits a crime but it’s like how can we invest in communities. All the money we spend on federal, state, and local jails, all that money could be so much better put to use with education, jobs, healthcare in society in ways that would reduce the number of people winding up behind bars. Kim: Absolutely! And I think to your first point regarding reforms and changing things in the immediate and looking to European models of prisons and what not. I think that there is a space for having a comparative analysis as to what other countries are doing that are better than what is happening here in the U.S. and if it improves the conditions of people on the inside, then Ok, great. However, what an abolitionist’s perspective actually does is that it provides a framework for understanding and placing that conditions have to be improved right now, however, the long term goal is not to just sit back and say, yeah, we improved conditions, but how do we not use prisons as an anchor for the problems that are happening in society? How do we or what other things can we use? And you mentioned some of those things: investing in communities, providing healthcare, mental health. Mental health is such a big part of this problem, not criminalizing drugs and seeing that these things don’t actually improve safety or security, but are used as the pretext for increasing the carceral state. I think that one of the things that we’re going to do in upcoming episodes is really delve into what do we mean by prison abolition. Today, I think that we can just give a quick definition of that, a working definition so people have that and to talk a little bit about what we mean when we say prison industrial complex so that we understand the language that’s being used here. Because I think particularly in this day and age, particularly in this political climate that our words matter and our words matter more than they have in the past. So providing clear definitions gives us a place to begin. It may not improve or increase understanding very much, but at least it gives us a place to begin so that we know that we’re talking about this thing over here, and not that thing over there. That said, one of the things I talk about when I talk about prison abolition and again using a lot of Angela Davis’ work, using the work of people from Critical Resistance, as well as Insight, and a number of other groups is to really think about it as a political vision. To think about how prison abolition constitutes a set of long term goals. There are things that we are doing right now, however, the goal is to eliminate and get rid of imprisonment, to get rid of policing and surveillance as the mechanisms that we use to address social problems. I think that’s really the most concrete way of putting it in really simple terms. It sounds easy but once we start unpacking that, I think there is just so much happening in that. So that framework include, for me at least, that framework of abolition is also anti-racist. It is when we talk about gender disparities. We’re including trans’ rights. We’re talking about immigration policy. We’re talking about all of these things that are happening right now and the kinds of policies that are being implemented by this administration that work against an abolitionist framework. I feel a sense of urgency now more than I have I think before. And I think I’ve had a sense of urgency for a long time. I don’t know. What do you think about that? Brian: I totally agree, and I think that we really need to have goals. And I think a lot of what’s happening in the prison reform movement and even just sort of larger on the left, I think you see that it’s a little different when you talk about when you talk about something like single-payer healthcare, for instance. I think we need to have these goals that even if they seem politically unfeasible in this moment, we have to have something to work toward. Like you said, provide a framework for what we’re doing, not only so that we don’t shut off any avenues to fully realize reform or anything like that, but just so that we’re going somewhere with this. This is the work of movements. You know, we might not see this in our lifetime. A lot of people that I talk to about abolition for their first time kind of scoff at you. They’re like, yeah right, there’s no way that would ever happen. The prison is such a fundamental institution in our society that obviously it’s much bigger than any one issue. I think that something that you were touching on or something that it made me think about when you were talking is that if you bring an abolitionist framework to this, it does inform the way you look at other policies and other areas of government and society instead of just sort of being content to fiddle with whatever problems are going on. It makes you want to investigate the root causes more, to question the system more. It also sort of gives you more empathy in a way. I feel like even the worst political foes that I could imagine, I definitely would like to understand more about why they are the way they are. That doesn’t mean I’d excuse their behavior, but just sort of a strategy. I feel so much that political fighting and everything today is like very in the moment and lacks a broader context. So, anyway, I think abolition is something that if there were ever a good time to talk about it, it would be now with things as awful as they are. I feel like we almost have more space to talk about abolition than we might have had a few years ago. Kim: Absolutely! Absolutely! Yeah, I think that one of the things that I wrote down in my notes in my preparation for today had to do with reforms, and one of the things that Angela Davis says is that the idea of reforms doesn’t go beyond the prison. So if all of your solutions begin and end with prisons, then there is really no room for alternatives in that reform model, and that’s the problem that I have as an abolitionist with the reform movement – that all of the solutions maintain these carceral institutions, so whether we’re talking about house arrest or surveillance, parole, probations, what have you, then it’s not really an alternative. You’re trying to give something a different look without doing much about the actual problem and this resonates with people. This is very appealing and again, this is extremely frustrating for me because again, as someone who was trained in policy and public policy research and what have you, the literature really approaches mass incarceration from those perspectives. So when we’re writing policy documents, when they’re doing evaluations of re-entry programs, for example, there are really no alternatives that are being presented that are not carceral alternatives. And that, for me, has been part of the problem for years. That, for me, the ‘Aha’ moment or the lead-up to the ‘Aha’ moment if we can even call it that, came a number of years ago, where it was evident that the further I dug down into re-entry and what was happening in communities was people returning from prison to certain communities. There’s a pattern there and that pattern is repeated over, over and over again across communities in this country. So the policies weren’t working. But it wasn’t enough to just say the policies aren’t working. What is actually happening here? What is informing these policies, and I think that was where I really started to go into the abolitionist literature because the public policy literature doesn’t discuss abolition. It completely neglects it. Abolition is something that, if you’re a political theorist that was talking about abolition from that perspective, and people are writing brilliant things about Foucault and what have you. But that information, that knowledge doesn’t transfer over to the public policy space. So how do we bring these things together? It’s not just political theorists, but philosophers and other people who are doing work on prison abolition, not just theoretical but practical work as well. How do we bring that knowledge to bear on policy choices so that in the choosing because people talk about public policy in sort of a disconnected way in this thing that’s happening somewhere in Washington and in the halls of the State Capitals and what have you, it’s some kind of mysterious process. No. People are making decisions, and those decisions are informed by people’s values, people’s understanding of the problem, etc., etc. And if we’re not attempting to understand that part of it in terms of what’s happening with so many people and disproportionately, black and brown people in this country going to prison, then we’re actually not being honest about trying to address what is happening here. What we’re doing is something else, but it’s not rooted in an honest, intellectual project that is going to give us public policies that improve the conditions for communities and the people that live in those communities. I think that, for me, that’s one of the strengths of an abolitionist’s perspective, and one of the things in my activism and in my scholarship and in my personal life that I have really committed to understanding in a lot of different ways. And I think that it presents a lot of challenges. It’s a difficult task to be an abolitionist. It’s not an easy thing to say that publicly and it’s even more difficult thing if you write about these issues, or facilitating workshops and conversations with people around these things. They always want to talk down to you and tell you that you’re misinformed somehow and that letting people out of prison is just going to run society. I’m like, have you read the paper? I mean, have you looked around? Angela Davis says this all the time: not having any prisons would actually improve things. No alternative would be better than having prisons and that really gets people’s backs up. They can’t handle that. I think to your point earlier about trying to understand where people are coming from with that, I think that’s an important piece of the overall puzzle in conversation here, and I’m looking forward to these conversations as the podcast unfolds and as we get deeper into these things. Brian: Yeah, and I just think one last thing I’ll say on your discussion of policy-making and peoples’, like you were saying, sort of arching their back and a lot of this stuff. I think it speaks to a lot of political incentives that end up shaping reform and that need to change, and hopefully conversations like the ones we’re going to have on this podcast can help change. Because it’s really hard, you have to admit on a certain level that it’s hard for policymakers to go out and maybe put out a reform that would reduce the number of violent offenders in prison because all it takes is one violent offender to make the news to cause a political backlash to that. I think because of that the incentives are so stacked to be harsher, whereas the political gain for showing leniency is so unfortunately low, and I think we need to completely invert that and sort of show politicians and these political figures, including prosecutors. To a certain degree, they’re followers. They’re going to take certain cues from the public in terms of what the public will support and what the public won’t support. So I do see the tide changing a little bit in terms of how people view ‘offenders.’ Obviously, it’s like a very niche group of offenders are given leniency right now, but it’s hopeful in the sense that it could–if we could have these conversations to get people to think differently, we could change those political incentives so that there is less of a risk for a politician to craft a policy or sign on to a policy that would decarcerate and that politicians won’t so strongly overreact to rises in crime and the public doesn’t prioritize the safety of some communities at the expense of others. Kim: Absolutely! And I think that this whole thing about who we let out of prison, and what is an acceptable kind of level of criminality–if we’re aiming for zero crime in society, we’re neglecting the fact that we’re dealing with human beings. So we need to talk about that. We need to address that on the front end and I don’t see where politicians do this very effectively, and I’m sure we’ll certainly critique the politician’s approach to public policy around incarceration and what have you. But we don’t have a world where we will be crime free. That world actually doesn’t exist. So a world without prisons is possible; a world without crime I’m not so sure. So I think that, how would we handle that crime? What constitutes a crime? So we have all sorts of examples currently in the news: defending yourself against a domestic abuser is considered a crime. So that’s a problem. What do we want to do with that? I mean, what we’re really saying to victims of violence is well we don’t care about you if you tried to defend yourself, then you are really the problem. How has that changed anything for that community, for that person, for their family or anything like that? So I think we need to move beyond the surface level analysis that is really popular and talk about the complexities involved with letting people, not just opening the doors and letting people run out of prison. We’re talking about a more thoughtful approach to decarceration, getting rid of cages. We’re talking about, as you mentioned earlier, providing people with healthcare and for me, particularly mental health, and what that would do. We know that there is a large proportion of the incarcerated population that has a documented mental illness. That’s a problem. And if our approach to these issues is basically to just lock them up for some indefinite amount of time, don’t provide them with any kind of counseling or support while they’re incarcerated, that somehow through the isolation and solitary monastic existence that these people are going to have some kind of ‘Aha’ moment, and magically come out being okay. Brian: That’s what I mean. Yeah, when I was saying earlier that I just feel like incarceration is so anti-science. I mean listening to the way you just described it, it sounds ridiculous! And we have at this point mountains of evidence showing how incarceration harms, and I would argue that we have very little evidence suggesting that incarceration as an end in itself works to do anything other than perpetuate misery. So, yeah, sorry I just wanted to chime in here. Kim: No, Absolutely! Brian: Because it always baffles me that we cling to this institution so strongly, but it’s complete pseudo-science the more that you dig into it. Kim:  Uh-huh, Absolutely! Absolutely! And I think that’s a valid point and that we need to talk about that more not just on here, but in the context of public policy choices that are being made. Targeting specific groups of people or to put people in prison who have drug problems makes no sense. It makes absolutely no sense. You don’t actually change the conditions for that individual by putting them in prison. Not just putting them in prison, but putting them in a cage and not giving them any kind of assistance. These things don’t happen, like they don’t just fall out of the sky and all of a sudden they walk out of prison and they’re going to magically never use again. And that seems to be the sort of approach towards carcerality here, why reforms are a huge problem because it relies on this notion that if you lock someone up and you take away everything that is meaningful to them, that is of value to them, their ties to the community no matter how strained those are, their ties to their family no matter how difficult that family might be, those are still ties that we are basically cutting off and say, Ok, we’re going to remove you from society, from everything that is near and dear to you, and now we’re expecting you to be ok. So when you come out, you should be ready to conquer the world. And then we set up this system of obstacles for a person who’s returning from prison and into the community, and we say, well you need to follow all these rules. Okay, so you go to prison from a community where most of the people that you know have also gone to prison, but we have laws in this country that prevent the association of people with a felony conviction from associating, so that can get you back into prison. That’s just so ridiculous! Who else would you know? It’s like if your parent went to prison and you’re their child and you also went to prison, we’re basically saying, well mom, dad, aunt, uncle, cousin, whatever the ties are, you can’t be around each other. So now we’re undermining the support system that would be there by making the association a criminal act. It’s like, God! How is this supposed to work? Brian:  Yeah, and I think one of the things that we all are going to need to talk about, and it’s going to be hard given just American culture in general, are these limits of individual responsibility. I think, as you were talking about earlier, that a lot of the way carcerality bleeds in, and the punitive structure bleeds into post-release and things like that, and you were talking about drug treatment programs and things like that. You know, even in that situation- let’s take drug treatment programs for instance. A lot of these programs are 12-step programs that are built around the individual basically accepting full responsibility for their actions, making no excuses outside of themselves, and supposedly being able to stay sober with that as their backing. And the truth of it is that there are limits to personal responsibility for somebody like that. I mean, if you live in a context in which drugs are always around, or maybe you have a chronic health issue and that’s how you became addicted to opiods. I mean, taking responsibility like that is just another, it’s like another one of these examples of sort of puritanical anti-science approach. It’s like disproved by incredible amounts of evidence. But we’re going to need to really as Americans dial back our desire to pin 100% total responsibility on people who commit crimes. And I just want to…I think this is a good time to talk about in terms of abolition too, Kim and I’m wondering what your thoughts are on this. When we talk about prison abolition and you said this earlier in a way, we’re not just talking about letting people out of prison. We need to… there still will be accountability after prison, right. There still will be justice. And hopefully, it won’t look like this. So, yeah, I don’t know if you have any thoughts on that. Kim: Yeah, I mean we need to talk about and explore new forms of justice. So the whole theatre that’s associated when someone gets sentenced to a long prison term is one of the problems. I obviously experienced that with my sons and this idea that somehow justice was being served within that context felt so…it’s painful and it’s still painful today. To think back on this and part of what that does is it creates further divisions within communities because we’re all in this together. We’re all in this together, and like you said, the American ethos of individual responsibility and resiliency and this kind of ‘you can do it, and I built it myself…and I didn’t need any help, and it’s not my responsibility to take care of you, etc., etc.,’ which is at the core of American society. People really really believe that, uncritically believe that. They don’t examine what they say around resiliency and individual responsibility at all, and we have medical models that are informed by this perspective. A lot of this probation and parole are informed by this perspective. A lot of re-entry programs are based on these perspectives, and the need to rely on personal transformation strategies as the preferred approach to dealing with crime and to dealing with people’s problems. Because I think we conflate that. We make people their problems. We don’t separate the two. We don’t say, Ok this person has a problem…we say, these people are a problem. So drug users are a problem, not wait a minute, let’s think about what is actually happening here. And as you pointed out, we’re living in a really un-scientific time. The lack of critical thinking around these things or the willingness to approach this from a scientifically informed perspective is another huge issue that we’re probably going to talk about in one way or another throughout every conversation that we have because it’s there. It’s part of every single issue, and to lay blame at an individual’s feet is…one of the things that I say quite a bit is that when we individualize, we moralize. It makes it really easy to moralize. We do a lot of finger wagging and we can say, oh you need to get your act together, you need to stop doing drugs, you need to stop doing this, and we’re very much invested in this notion of choice; that an individual chose this path as opposed to this other path. And when we do that, what we’re doing is obscuring the fact that there are conditions and that there is a system in place that perpetuates these conditions that can strain your choices. So if you can’t eat because you don’t have a job and because you can’t go to your mama’s house because of whatever reason or because there are federal policies that prevent you from crashing on her couch because she lives in HUD housing or something ridiculous like that. And you’re back on the street. I mean, what would you do? Because I think about that quite often and I would do whatever I need to do to eat. I would do whatever I needed to do to survive, and I live in L.A. I have been in supermarkets out here where I’ve seen people arrested who are hungry. They’re coming in and they’re stealing a loaf of bread or something small like that, and the police are called because that is the system that we have. Instead of the manager just giving them the damn loaf of bread and keeping it moving, it’s like…No, we have to call the police. Now you have another set of problems there. I think that part of our…part of what I’m hoping we’ll do is to unpack that a little bit more in a more critical way, and bring people on as guests who can discuss these issues in a really well informed way to get us to think about this stuff beyond the superficial, beyond this sort of knee-jerk reaction to petty crime. But, that said, I also feel that we need to talk about violent crime, and that without the conversation or a set of conversations about violent criminals that we would be doing a disservice to what we’re saying we want to do with this podcast. I think that we need to address what happens when the unthinkable happens, and how do we deal with that and how do we address that? How can communities come together and what does a justice model look like that says, ok, well we need to talk about that more… We need to address the fears that people have and discuss ways that someone who has committed a really horrific crime can be held accountable. It doesn’t produce more harm. It doesn’t perpetuate the pain that already exists because I don’t think, in speaking from my own experience…the pain doesn’t go away. The pain when something horrible happens in your family with crime …that pain doesn’t leave. It doesn’t get better with time. It is just as fresh today as it was the day that it happened, and I think that is something that for me, on a personal level, that I want to talk about more and to bring in families that have been impacted in these ways by crime on both sides. I think that’s an important conversation to have, and something that in transformative justice circles and restorative justice circles has been happening for a lot of years, and there are ways to approach those conversations. But we can’t do that until we talk about accountability. But if accountability is happening in very narrow terms of ‘lock them up and throw away the key’, that doesn’t cohere with an abolitionist perspective, and as you can see, there is a lot to talk about. Brian: There is. Kim: There is no shortage of topics here. I think we barely scratched the surface today. I’m excited about what we can do with this podcast. I don’t know. Do you have any additional thoughts? Brian: There’s just one more thing that I wanted to bring up, and I am curious what you think about this, too. I think a lot of times when people bring up these arguments somebody might say to you, Well, Kim, what about the victims? What about the people who the crimes are perpetrated against? Don’t you think that deserve our empathy too? I don’t know what you would say. I would say our system is not designed at all right now to really empower victims in any meaningful way outside of punishment. I think prosecutors by and large aren’t really interested in what a victim would like to do. I wrote about earlier this year that the vast majority of crime victims, including violent crime victims would prefer rehabilitation over incarceration. There’s a lot of myths that, I would also say that maybe people wouldn’t be victims if we didn’t have incarceration and were addressing these root causes. That was really the last thing that I want to bring up. I’m just thinking about some of the things that might come to your mind when you’re thinking about prison abolition for the first time, sort of these ingrained defenses that we have as Americans against imagining a world without prisons. Like you said, a lot of this, we will be digging in very deeply on all these subjects with guests, and I’m very, very excited. So, yeah, we want to know what questions you have. You can email me at brian@shadowproof.com. We would be happy to take tips from people and hear how people react to the show and a lot of ideas that we have. Honestly, I want to hear what sort of problems people have with a lot of these ideas because I think that a lot of these conversations are going to be really uncomfortable for a lot of people. They’re gonna be really difficult. We’re going to be talking about violence, and sexual offenses and things like this that we react to in a certain way. But we need to have these conversations if we’re really going to make a meaningful impact on this issue. What about you, Kim? Do you have any final thoughts? Kim: Yeah, I think that there are a number of victims groups around the country that have been very outspoken against things like the death penalty, and I’ve been working with some groups, some people in Delaware around this as well, whose families have been the victims of violent crimes. And it’s a difficult conversation, but I can tell you that from my own experience, talking with these families, they have been out front of the death penalty abolition movement, and they have said things not in their name, like you can’t kill someone because you lost someone in their name. And this notion of state sanctioned violence as a way to mete out justice is deeply problematic for a lot of people, not just on a moral level because they do think that it’s wrong, but in terms of what this actually does. What does this actually do? It doesn’t feel good, but then again, I think that the people who are best able to talk about this issue are the victims. I don’t want to speak for anyone. If anything, another goal that I have for this podcast is really to amplify and marginalize people’s voices, and to let people speak for themselves rather than talking over them or for them. You’ll hear me say a lot, I’m speaking for myself, because I think that needs to be clear that I’m not talking for other folks here. I think that in general, I look forward to hearing what people have to say. I think that these are courageous conversations that we need to have, that they’re going to require us to have really strong backs to address. We’ll certainly give people trigger warnings around certain issues. There might be a trigger warning around the entire podcast. I mean, I don’t even know. That includes just as much for my own benefit as for anybody else’s because this isn’t easy. I’m on board with this project because it gives me a way to sort of channel this energy that I have and to bring this work to a much bigger audience, and to include a lot more people in this conversation. Before I forget, if people want to contact me, I’m at wilsonk68@gmail.com and I look forward to hearing about what people have to say and if they want to chime in, and if they want to have ideas for future topics. Certainly, I’m open to these things. Hate mail you can send somewhere else. I’m not interested in the hate mail and the abusive nonsense that I’m sure we’re going to get as a result of putting ourselves out there on these issues. It’s been, this has been great. I enjoyed this conversation. I think it was a lot easier than I thought, huh. Brian: Yeah, I know seriously. I’m really glad to be doing this with you Kim so thank you very much and thank you everybody for listening. We will have another episode out soon. You can subscribe to us on Itunes Beyond Prisons and stay tuned for our next episode. Thank you so much.

【特别感谢热心听友Trevino Zhang-张静娴帮忙听写本篇文稿。另外，Trevino同学的文稿是100%的正确率，在此特提出表扬】Heyang: And on that survey conducted jointly by EZFM, our radio station, and also the British Embassy Beijing. I mean, we looked at other interesting questions, including this one, that is, do you think that there is gender bias in our media reports? Zeroing in on language usage in media, which sometimes can reinforce gender stereotypes without you even noticing it. And guys, do you see that there is a bias, what do those youth respondents tend to say？Brian: Well, I would say, I was a bit surprised, but not too surprised, half of the respondents think that there is a bias, and the other half don't. That may be surprising to you if you think there is, and I think that there is. But you have to realize that this is just we're so used to it. This kind of, just reflects how things are. For example, a lot of the time when women are described in the news reports, you'll hear descriptions of their age, their appearance, you know, their family roles or whatever, far more often than you hear with men, and people are just used to that, used to thinking of women in these sorts of ways, to where you see that, that is not unusual at all. Whereas if you see the same amount given to men, you would feel a little bit odd, not that that doesn't happen, but it happens not nearly as much there. So I think, this is just one sort of example there, but it's quite common, so common in fact that I think that's part of the reason why some people don't even see it.Megan: Absolutely. I think you mentioned a very interesting thing there about we don't even notice it and the way women are described in the media, and I was thinking particularly women in politics, so for example, ambassador Barbara Woodward, she is our first female British ambassador to China, and she is doing a great job, supporting this campaign for gender equality. And, you know, she holds a very important role, which is great, but across the world, that's not always the case. And you hear people talk about women in politics, for example, Angela Merkel. There were some comments said about how she looks, and how she dresses, and really, that's not what we should be focusing on. We should be focusing on the great job they do, or you know, how they think, their skills, their talents, rather than how they look.Heyang: Exactly, and it often appalls me, when these female world leaders, or women in leading positions in big companies, and they've worked that hard to get there, and they are making important decisions, and what the viewer or the audience cares about is where did she do her hair, what kind of suit is she wearing, and is she getting a little bit fat? And it's like, people, can't you just grow up a little bit, and look at what the real problem is here. That is you, looking at these ladies in that very biased eye.Brian: Right, right. And there are so many more important things going on. Like Angela Merkel for example, she is probably the most important leader in all of Europe, and she has way more stuff on her plate, way more important things to do, than you know, what is she wearing or these trivial sorts of things there, I mean, and it's again, it's not you sometimes see that for men as well, but it's just a distraction from what's important there, and there is just, there is also far more scrutiny on women. For example, in the US, we are seeing this. Obviously the political Campaign for presidents, and Hillary Clinton regardless of whatever else, sees a lot more scrutiny on her, in particular her appearance, but other aspects as well, because she is a woman, and that's the true all of the world, I think. Heyang: Yes, and that's something that's gotta be changed, and rising people's awareness in this regard is the first thing we can do. Talking about these kind of gender stereotypes, our Wechat listener Giraffe, I think that's your name, it's very interesting on our bullet curtain, is a comment from her. She says that her boyfriend often meets older women in the supermarket when he is doing some grocery shopping, and then, these older people ask her boyfriend, "why are you doing shopping for groceries for the household? Is that because you earn less than your female counterpart in your household?" Oh my gosh, how can we change people's perception on this, why is it that there is this gender stereotype rot that people are just sunken into.Brian: I think humans have just been like this, or at lease society has been like this for ages and ages, but I think it's very telling what you said there, it's the old ladies that are coming up to him in the supermarket, it's not , you know, the young people right out of college, or little girls that are saying that, it's these old ladies who've been raised in this society where, you know, that was women's work, men didn't do that, you know, men don't enter the kitchens, sort of things there. And I think, as time goes on obviously, this education and talking about this, this messaging is important, but you know, part of it will just happen naturally as the generations go on.Heyang: Yes, and more importantly I think, when we are hailing for women's right or being a feminist myself, we’ve kind of touched up on this, earlier on, but I'm gotta say it right now, it's not just about elevating women's right, but it's also meaning that guys can get a wider scope of option. It's like guys, you shouldn't be confined into your gender role either, it's fine to be a little bit metrosexual maybe. （Men could love shopping.) Yes, and also, you know, pluck your eyebrows, that's fine too, although that's a little bit too much for my taste. But still, it means more choice, more options for everyone, and that is what we are hailing for. And too bad, we only have this much time, one last thing I would like to direct to Megan is, be yourself, what is that one golden tip you would give to all of us.Megan: The golden tip is to remember, you can do whatever you want, so remember to be yourself, and remember to strive to achieve what you want to achieve no matter your gender.Heyang: Well said, and we'll end with that note on very special day and like I've said so many times on the show, women's right is not something we only discuss on International Women's Day, it should be every day.

Heyang: Toothache can be a real joy killer, especially when a delicious meal is laid in front of you. Experts are saying dental health has been neglected by Chinese people for years. Is having bad teeth a long-time headache for many Chinese people? I think I should direct the question to Luoyu first. Do you agree with a statement as such that Chinese people have bad teeth and it’s a bit of headache?Luoyu: I tend to agree. I actually remember the story you told me the other day in the morning. We had a lovely discussion. You said…Heyang: What? I was involved? I don’t think I was there, but, Okay, carry on.Brian: Maybe it was lovely for one party, but not for the other.Heyang: You are so sharp. Some stuff should be left unsaid. Luoyu: You said you are on a subway car, and all of the sudden there is a man standing next to you showing his butter-colored teeth as well as the bad breath from him…Heyang: Yeah, it’s terrible, terrible experience. It was only when I noticed that guy standing next to me had really bad odor…I think he had Chinese chives the night before, amongst seafood and stuff and it was terrible. So I looked at him at the corner of my eye, and I realized he had bad teeth as well. Okay, why are we talking about this? Sorry if I’ve disgusted you.Luoyu: Right, actually that’s an indication that generally speaking Chinese people don’t pay enough attention to their dental care. I also have two surveys to back up my argument. The very first survey is this Oral health epidemiology survey. This latest survey shows that about 80% to 97% of Chinese people have periodontal diseases to some extent. In Chinese, that’s牙周疾病. It seems that almost everyone in China has the problem. And another survey has actually shown even more staggering numbers. That Chinese preventive medicine society estimated that nearly 500 million people in China, mostly in rural areas, never brush their teeth. Brian: That is shocking! That is shocking to me. I hope that’s not true. I know obviously Chinese people are not in the most ideal condition for dental health. But over a third of Chinese people don’t brush their teeth? Er, I hope not. Heyang: You are overwhelmed by that figure.Brian: It is. That’s a ton of people. Heyang: I think there is a difference in life style because it hasn’t really been brought to their attention. Brian: This consciousness.Heyang: yes, (this consciousness) that you need to brush your teeth. I’m really curious then are there people that don’t brush their teeth and their teeth are still Okay? That could be the case too!Brian: Yeah, it is probably the case. It seems to me this is kind of like mental health in a certain way. China is by no means the only place with this issue, but obviously you know regular health, if you get sick, you know you need to do something about it because it is bothering you. But say with dental health, mental health, it’s just not as obvious and there’s not this idea or this consciousness about it. So people are less likely to do as many preventative measures as well as going to get care when you need it. Heyang: Yeah, and just add one small personal observation when it comes to bad teeth in China, actually I talked to some of our colleagues in the office. Our small circle seem to agree that in China it is rather common for someone who’s only in their fifties, they already have teeth that’s like falling out. That’s not an uncommon problem. But if you do a comparison, let’s say, with some developed countries, or countries with a culture that look after their teeth more attentively, then you don’t see this happening as much. So guys, why do you think there is this problem that we don’t look after our teeth?Luoyu: Consciousness is definitely one thing. And sometimes I think the Chinese people lack the basic knowledge of how to protect their teeth. For example, when we pick up the brushes, we don’t know which one is the best brush for you. Do you know, Brian? Brian: Well, I know in the US…Luoyu: When it comes to the stiffness of the bristle.Brian: Well, I don’t know exactly. What I would do in the U.S., there is an American Dental Association, which I believe does a good job, and they have their seal on certain toothbrushes. Some cheap like 99 cents toothbrush, that’s probably not as good. But admittedly, another thing you see in the U.S., is like mechanical toothbrushes.Heyang: yeah, I think a lack of awareness, being aware that this is being a big deal is a big problem here as in our culture there seems to be the saying about “Having toothache is not a disease, but when the tooth actually aches, it can kill you.” So it should be considered as a disease too, right?Brian: Right. I feel like a lot people don’t pay much attention to their teeth unless it hurts whereas what probably you should do is treating your teeth like your body. Check it at least once a year. Luoyu: I have some advice as well. For one thing, if you really have those crooked teeth at an early age probably you need a dental brace procedure.Brian: Related to both what Luoyu said and what I said is you have to have money or more often insurance. If you don’t have health insurance that covers this, then you are not as likely to do that and afford it.Heyang: Yes, and also I think here is the place that parents have a big role to play as I know sometimes bad teeth or crooked teeth have been passed on from generation to generation. But that is not a general case, I think. Parents need to tell their kids that especially when your teeth change, that’s when you need to pay more attention to the kid’s teeth and make sure that they are growing in a really straight fashion. Brian: And floss daily Heyang: Okay, and visit your dentist.

【特别感谢热心听友吕欣欣帮忙听写本篇文稿】Heyang: In Chengdu, an underage girl had plastic surgery, without the consent of her parents. She also owed the hospital over 10 thousand Yuan for her surgery. How could this have happened in the first place?So guys, here is a story that’s a little bit complicated here. Could you please unpack the story for me?Brian: I will attempt to. So we have Xiao Zhen here who is a 17-year-old girl, not feeling so great about the way she looks. So she decides, “oh, I’ll have some micro plastic surgery on my face to make things better”, so this was last November. And it cost over 12000 yuan in Chengdu there. And she didn’t have that much money. She’s a student. So what she does is rather than talking to her parents at all about this which seems like she did not do, she goes to a friend who’s over 18 and says, “hey, can you help me apply for a loan here?” So her friend applies for the loan. And then she uses that there and goes all behind her parents’ back.Luoyu: Well, is it really she asked some of her friends to lend her the money?Brian: She asked her friend to apply for the loan, for her, not to lend her the money.Luoyu: I think the hospital basically arranged everything for this. I mean, basically for the very first time when the 17 year-old girl consulted with the hospital staff, the person, the staff refused her to take the surgery because she got to know that this girl is only 17 years old. And for the very second time, she didn’t tell this member she was 17. Yet this staff from the hospital told her that if you lack financial means, we can definitely help you with it by borrowing some money from the loan companies.Heyang: So the hospital directed this girl to the loan company (Luoyu: Yes), and get the financial side of things sorted out so the underage girl can have plastic surgery. Is this the story? (Luoyu: Yes) Right. Who is at a greater fault here? I mean, we’ve got at least 4 parties in play here, right? The girl herself, her parents who’s like completely out of the picture until they wanted to get compensation, and there’s the hospital and loan company, who’s at fault here?Brian: Well, who’s at fault versus who’s at greater fault because I think we can say that all of them are at fault to some degree. But to me I think the greatest would be the hospital. Because she’s under 18, she should not be allowed to do this at all and it happened. And not only that, they helped point her to this loan company for this huge loan which she was gonna take on on her own as a student with no income. And again she couldn&`&t get the loan. She was not supposed to get the loan being under 18 there. So the hospital has done several bad things here on top of the girl who was foolish in multiple ways. But it’s really the hospital enabled her. There’s supposed to be restrictions and you know, following the rules so that when young people who are not as fully developed, wanna do something that’s not very wise, they’re stopped from doing that. And the hospital is the one who didn’t stop her, and they’re at biggest fault.Luoyu: Well, the hospital doesn&`&t have any reason to stop the 17-year-old girl to…Brain: She’s 17. Of course they have a reason. She’s not supposed to be getting about it.Luoyu: But come on, I mean, the purpose for the hospital is to gain profit especially the hospital in a private sector. And when we’re talking about this, I mean, the verification process doesn’t even exist in this hospital. The loan applicant is not the one who received the surgery. So I think the whole industry should be standardized, maybe?Brain: There’s a fair point there but I would say, hospitals I mean, yeah they’re for profit, but there’re rules, too, man.Heyang: Yeah there’re rules and Luoyu thinks the hospital is right along all this time?Luoyu: No no no I don&`&t think it’s all right.Brian: Not as much.Heyang: We have some listeners who have a very strong opinion about underage girl who got a loan to get plastic surgery without the consent of her parents’ story. As Qiang says, I think it is the girl herself that is fully responsible here and her parents are at fault that they did not pay attention or enough attention to this girl’s demand or, you know. I think Qiang thinks that for someone who so desperately wants plastic surgery, the parents should educate and console her a bit more and he doesn’t really agree with it. And Han says the girl is responsible for this. She should let her…Okay here comes the interesting bit. She should let her parents know that having a pretty face is a really good investment nowadays. And…(Luoyu: Which I agree with.)But everybody’s entitled. They have their own opinion.(Brian: True. True.) And we will attack Luoyu after I finish reading this post. And Han also says she should ask her parents to pay for it. I don&`&t think there’s a law saying that parent involvement is necessary for underage people to go to the hospital to have a surgery. And to my knowledge this is actually incorrect, Han. Guys, do you have anything to add here?Brian: Yeah, that is the case. So the hospital cannot refuse patients if they’re under 18. There’s no law says that. But there is a regulation that says they have to be accompanied by parents and they need their signature there. So if the girl had been with her parents and done all this, the hospital would not have been wrong in doing that, right? She wasn’t with her parents so this is one of many wrongs on the hospital there. And so a lot of it is enforcement of these rules cos we have all these rules here the hospital should have been following. And again the morality of this young person and this is why we have these to protect young people who don’t know what they’re doing as much. And the hospital didn’t follow them. It didn’t force its rules. Therefore they are at greatest fault.Luoyu: That’s why I say that this industry, the whole industry should be regulated to prevent some of the loopholes here. And if you look at the loan company in the hospital, basically hospital arranged everything, every little bit of this loan, and they’re on the same boat to be part of this black market or interest chains together to make money because this hospital is a private hospital as the nature of the private entity is profit driven, right? So they have to make money. If you don&`&t impose them with the further regulations, they’re gonna do this anyway.Brian: Right, right, it is not just regulation, but stronger regulation and enforcement as with many things, enforcement is the key to a lot of things here.

Heyang: Rope skipping and throwing sandbags during the class break have been fond childhood memories for many of us. But these days, some students in primary schools in Beijing are kept in the classroom during recess. Why do teachers ban them from going to play outdoors? What is going on with this very obscure and very weird school regulation? Brian: Well, you see different things. Some places, you are just not allowed to go outside the classroom at all. Other times, it would be you can go on the corridors or maybe you can go on the corridors, the hallways but you are not allowed to run around and jump whatever. So there’s different ways. But very much there’s this trend here in Beijing but also in other parts of China of not letting kids do what I think we can say they are naturally going to do and should do, which is go run around and have fun or whatever. Luo Yu: Well, I think the school just banned the behavior of students out of very good intention. For one thing, most of the schools’ space is very limited, and consider about those very naughty boys. And not to mention from the safety perspective, I think in last year Sep. 26th, at an elementary school there in Kunming, basically a lot of children tramped over children who were crashed under the mattresses. This accident actually caused six people dead and more than twenty hurt. Parents are very much concerned about their children’s safety, so if you just let all the students go out there on the playground whatever, probably the tragedy will happen again. My concern is how to have some of the very innovative ways for children to not keep sedentary, let them play but in a proper place through proper means. You know what I mean? Heyang: Not really I’m sorry. It sounds like in heaven where there’s just unlimited space and we just jump around, floating on those clouds. And Luo Yu, I understand what you are saying, but just give you another question. Sorry so many questions. That’s just my job, all right? So basically, if you are afraid, let’s say the students, you don’t want them to get hurt so you keep them indoors. Then I mean there’s always the danger when I go out in the streets, knock wood, that I could get hit by a bus. But that doesn’t stop me from going out because you need to do so and you want to stay fit. And you know that’s a good reason for the students too. So don’t you think that the way that the school is managing this difficult matter is not right? Brian: Right. I would say safety is obviously important. If your playground is not in a safe area, if there’s construction right next to it, something needs to be done about that. Maybe you need to do some with the construction. But I think kids should go outside and they should get hurt. They should get hurt a lot. But if you getting, you know, you fell down you get a scratch whatever or you get bruises, that is normal and that is a good thing. Because that’s what life is. Like you can’t just stay and locked up in your room inside and just expect to get by with that. And kids, if they don’t do it here, they’ll do it outside there. So better to do it in a safer environment where they might get a little bit hurt but so they can learn how not to get hurts and how to deal with this rather than just hide them away from dangerous of the outside world. Heyang: Yeah, I think there’s a lot of reasons like if you keep people staying in, you could get fat, you could get bad eyesight, you could… all kinds of things. Do you think there are, just very quickly, any good suggestions? Not really, OK. Luo Yu: Probably have them learn some very nice dancing moves inside the classroom? Otherwise the space is limited. Heyang: Yeah, square dancing inside!